Service customization: To upgrade or to downgrade? An investigation of how option framing affects tourists' choice of package-tour services

Package-tour operators often tailor trips to fit travelers' personal requirements to create higher customer value. In practice, there are various options available for presenting an identical package tour to potential customers. This research investigates how option framing influences travelers' decision making in a package-tour customization task. Based on a behavioral study and a logistic regression analysis, our results show that: (1) when both upgrading (i.e., starting from an economic package and customizing upwards) and downgrading (i.e., beginning with a luxury package and customizing downwards) methods are available, more consumers prefer upgrading to downgrading; (2) consumers customize their tour packages to a higher total price in the downgrading condition; (3) after separating peripheral service from core service attributes, our results further reveal that option framing affects peripheral services more than core services; and (4) consumers who are quality conscious and promotion-focused are more likely to choose a downgrading method for package-tour customization. Combined, these findings offer important managerial implications for travel companies. (C) 2011 Elsevier Ltd. All rights reserved.