Perceived benefits and willingness to pay premium for luxury experiences: exploring perceived authenticity as a mediator

Abstract

The majority of the studies on luxury brands have focused on examining the determinants of customers' positive behaviour and identified the crucial role of authentic experiences. Although customers' perceived authenticity is the core concept in the brand management context, only a few studies have examined the role of authenticity in the luxury service setting. Many luxury hotel brands have communicated recently with customers with authentic experiences. Thus this study examines the relationship among perceived benefits, brand authenticity and willingness to pay premium. Partial least squared-structural equation modelling is used to test the effects of the preceding variables on customers' positive behavioural intention. Data are collected from an online survey platform consisting of 177 luxury hotel customers in the USA. Findings suggest that self and social benefits influence customers' perceived authenticity, while the perceived benefit is insufficient to create positive behavioural intention. Brand authenticity directly and indirectly influences customers' intention to pay premium for luxury hotel brands. Thus reinforcing the authenticity of luxury service brands can strengthen the impact of perceived benefits on company performance.