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Why are hotel room prices different? Exploring spatially varying relationships between room price and hotel attributes

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  • Kim, Jinwon
  • Jang, Seongsoo
  • Kang, Sanghoon
  • Kim, SeungHyun (James)

Abstract

Despite abundant research on modeling hotel room prices, traditional hedonic pricing models (HPMs) have failed to consider spatial variations in the relationships among hotel room price and attribute variables. This study demonstrates the utility of a spatial HPM (s-HPM) using a geographically weighted regression analysis of 387 hotels in the Chicago area. Specifically, this study explored spatial variations in modeling hotel room prices and further identified spatial clustering patterns of relationships between room price and hotel attributes across market segments. The findings reveal that the s-HPM successfully identified spatially varying relationships between room price and hotel attributes, such as site attributes – size, age, class and service quality – and situation attributes – distances to airports, highways and tourist attractions – across the study area. This study contributes to a better understanding of local patterns of modeling room prices, ultimately providing guidelines for effective location-based hotel room pricing strategies.

Suggested Citation

  • Kim, Jinwon & Jang, Seongsoo & Kang, Sanghoon & Kim, SeungHyun (James), 2020. "Why are hotel room prices different? Exploring spatially varying relationships between room price and hotel attributes," Journal of Business Research, Elsevier, vol. 107(C), pages 118-129.
    • Handle: RePEc:eee:jbrese:v:107:y:2020:i:c:p:118-129
    DOI: 10.1016/j.jbusres.2018.09.006
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    2. Guizzardi, Andrea & Mariani, Marcello M. & Stacchini, Annalisa, 2022. "A temporal construal theory explanation of the price-quality relationship in online dynamic pricing," Journal of Business Research, Elsevier, vol. 146(C), pages 32-44.
    3. Tao Hu & Haoyu Song, 2022. "Analysis of Influencing Factors and Distribution Simulation of Budget Hotel Room Pricing Based on Big Data and Machine Learning from a Spatial Perspective," Sustainability, MDPI, vol. 15(1), pages 1-18, December.
    4. Zhang, Ziqiong & Qiao, Shuchen & Chen, Ying & Zhang, Zili, 2022. "Effects of spatial distance on consumers' review effort," Annals of Tourism Research, Elsevier, vol. 94(C).
    5. Kowoon Kim & Hong-Youl Ha, 2023. "Do Changes in Attribute Weights between Two Platforms Alter Interplay Effects in the O2O Era? Two Time-Lag Intervals in the Tourism Sector," Sustainability, MDPI, vol. 15(14), pages 1-16, July.
    6. Zhang, Yixiang & Li, Juan & Tao, Wenwen, 2021. "Does energy efficiency affect appliance prices? Empirical analysis of air conditioners in China based on propensity score matching," Energy Economics, Elsevier, vol. 101(C).
    7. Jang, Seongsoo & Kim, Jinwon, 2022. "Remedying Airbnb COVID-19 disruption through tourism clusters and community resilience," Journal of Business Research, Elsevier, vol. 139(C), pages 529-542.
    8. Lee, Yong-Jin Alex & Jang, Seongsoo & Kim, Jinwon, 2020. "Tourism clusters and peer-to-peer accommodation," Annals of Tourism Research, Elsevier, vol. 83(C).
    9. Chuanming Sun & Xingyu Chai & Qing Fan & Wenyuan Zhang, 2023. "The Impact of Hygiene Factors on Online Hotel Consumption in China during the COVID-19 Pandemic," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    10. Chansoo Park & Young-Rae Kim & Jihwan Yeon, 2023. "Stronger together: International tourists “spillover†into close countries," Tourism Economics, , vol. 29(5), pages 1204-1224, August.
    11. Wasfi Alrawabdeh, 2022. "Seasonal balancing of revenue and demand in hotel industry: the case of Dubai City," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 21(1), pages 36-49, February.

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