Out of sight, out of cancellation: The impact of psychological distance on the cancellation behavior of tourists

Travel products such as package tours, Airtels, hotel rooms, and airline seats lose their value unless they are sold by a certain date. Therefore, predicting customer behavior allows travel companies to maximize their profits, minimize their loss of revenue by balancing supply and demand (e.g., determining an overbooking level), and wisely respond to pressures from the government and customer groups to lessen cancellation penalties. For this reason, it is important to investigate what cause people to cancel their travel plans after reservations have been made. Based on construal level theory (CLT), this study tries to identify the reasons for the cancellation behavior of customers in accordance with different types of psychological distance between travelers and their travel or reservation behavior. Moreover, it examines the moderating role of tourists’ dependence on a travel agency in these relationships for predicting tourist cancellation patterns in a more specific manner.