IDEAS home Printed from https://ideas.repec.org/a/eee/touman/v56y2016icp40-51.html
   My bibliography  Save this article

Market accessibility and hotel prices in the Caribbean: The moderating effect of quality-signaling factors

Author

Listed:
  • Yang, Yang
  • Mueller, Noah J.
  • Croes, Robertico R.

Abstract

The purpose of the paper is to investigate the influence of market accessibility on hotel prices and how this influence is moderated by various quality-signaling factors, such as online user ratings, “thumbs up” (recommendation) percentage, hotel class, and chain affiliation. Using a randomized sample of hotels in the Caribbean islands, we employ a three-level mixed-effect linear regression model to investigate the plausible relationship between market accessibility and hotel prices. After controlling for unobserved island-level and hotel-level characteristics, the model indicates that in most periods, low market accessibility (high flight costs) leads to lower hotel prices, and this influence is mitigated by well-established positive reputations as represented by the quality-signaling factors. Our findings imply that hotels should work to increase their reputations to help buffer the impacts of inaccessibility. In an effort to increase market accessibility, one course of action is to reduce airport landing taxes and fees.

Suggested Citation

  • Yang, Yang & Mueller, Noah J. & Croes, Robertico R., 2016. "Market accessibility and hotel prices in the Caribbean: The moderating effect of quality-signaling factors," Tourism Management, Elsevier, vol. 56(C), pages 40-51.
    • Handle: RePEc:eee:touman:v:56:y:2016:i:c:p:40-51
    DOI: 10.1016/j.tourman.2016.03.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S026151771630036X
    Download Restriction: no
    File URL: https://libkey.io/10.1016/j.tourman.2016.03.021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Balaguer, Jacint & Pernías, José C., 2013. "Relationship between spatial agglomeration and hotel prices. Evidence from business and tourism consumers," Tourism Management, Elsevier, vol. 36(C), pages 391-400.
    2. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    3. Goodman, Allen C., 1978. "Hedonic prices, price indices and housing markets," Journal of Urban Economics, Elsevier, vol. 5(4), pages 471-484, October.
    4. Goodman, Allen C. & Thibodeau, Thomas G., 2003. "Housing market segmentation and hedonic prediction accuracy," Journal of Housing Economics, Elsevier, vol. 12(3), pages 181-201, September.
    5. Andreas Papatheodorou & Zheng Lei & Alexandros Apostolakis, 2012. "Hedonic Price Analysis," Chapters, in: Larry Dwyer & Alison Gill & Neelu Seetaram (ed.), Handbook of Research Methods in Tourism, chapter 9, Edward Elgar Publishing.
    6. Guodong (Gordon) Gao & Anandasivam Gopal & Ritu Agarwal, 2010. "Contingent Effects of Quality Signaling: Evidence from the Indian Offshore IT Services Industry," Management Science, INFORMS, vol. 56(6), pages 1012-1029, June.
    7. Cervero, Robert & Kang, Chang Deok, 2011. "Bus rapid transit impacts on land uses and land values in Seoul, Korea," Transport Policy, Elsevier, vol. 18(1), pages 102-116, January.
    8. Hamilton, Jacqueline M., 2007. "Coastal landscape and the hedonic price of accommodation," Ecological Economics, Elsevier, vol. 62(3-4), pages 594-602, May.
    9. Anindya Ghose & Panagiotis G. Ipeirotis & Beibei Li, 2012. "Designing Ranking Systems for Hotels on Travel Search Engines by Mining User-Generated and Crowdsourced Content," Marketing Science, INFORMS, vol. 31(3), pages 493-520, May.
    10. Abrate, Graziano & Capriello, Antonella & Fraquelli, Giovanni, 2011. "When quality signals talk: Evidence from the Turin hotel industry," Tourism Management, Elsevier, vol. 32(4), pages 912-921.
    11. Scott Orford, 2002. "Valuing Locational Externalities: A GIS and Multilevel Modelling Approach," Environment and Planning B, , vol. 29(1), pages 105-127, February.
    12. Peng, Bo & Song, Haiyan & Crouch, Geoffrey I., 2014. "A meta-analysis of international tourism demand forecasting and implications for practice," Tourism Management, Elsevier, vol. 45(C), pages 181-193.
    13. Ryan C. McDevitt, 2011. "Names and Reputations: An Empirical Analysis," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 193-209, August.
    14. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    15. J.M. Espinet & M. Saez & G. Coenders & M. FluviÃ, 2003. "Effect on Prices of the Attributes of Holiday Hotels: A Hedonic Prices Approach," Tourism Economics, , vol. 9(2), pages 165-177, June.
    16. Rigall-I-Torrent, Ricard & Fluvià, Modest & Ballester, Ramon & Saló, Albert & Ariza, Eduard & Espinet, Josep-Maria, 2011. "The effects of beach characteristics and location with respect to hotel prices," Tourism Management, Elsevier, vol. 32(5), pages 1150-1158.
    17. Sainz-González, Rubén & Núnez-Sánchez, Ramón & Coto-Millán, Pablo, 2011. "The impact of airport fees on fares for the leisure air travel market: The case of Spain," Journal of Air Transport Management, Elsevier, vol. 17(3), pages 158-162.
    18. Sparks, Beverley A. & Browning, Victoria, 2011. "The impact of online reviews on hotel booking intentions and perception of trust," Tourism Management, Elsevier, vol. 32(6), pages 1310-1323.
    19. Fleischer, Aliza, 2012. "A room with a view—A valuation of the Mediterranean Sea view," Tourism Management, Elsevier, vol. 33(3), pages 598-602.
    20. Scott Orford, 2000. "Modelling Spatial Structures in Local Housing Market Dynamics: A Multilevel Perspective," Urban Studies, Urban Studies Journal Limited, vol. 37(9), pages 1643-1671, August.
    21. Ching-Fu Chen & R. Rothschild, 2010. "An Application of Hedonic Pricing Analysis to the Case of Hotel Rooms in Taipei," Tourism Economics, , vol. 16(3), pages 685-694, September.
    22. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    23. David Andersson, 2010. "Hotel attributes and hedonic prices: an analysis of internet-based transactions in Singapore’s market for hotel rooms," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(2), pages 229-240, April.
    24. Rigall-I-Torrent, Ricard & Fluvià, Modest, 2011. "Managing tourism products and destinations embedding public good components: A hedonic approach," Tourism Management, Elsevier, vol. 32(2), pages 244-255.
    25. Aliza Fleischer, 2012. "A Room with a View — A Valuation of the Mediterranean Sea View," ERSA conference papers ersa12p144, European Regional Science Association.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Loïc Lévi & Jean Jacques Nowak & Sylvain Petit & Hakim Hammadou, 2022. "Industrial legacy and hotel pricing: An application of spatial hedonic pricing analysis in Nord-Pas-de-Calais, France," Tourism Economics, , vol. 28(4), pages 870-898, June.
    2. Masiero, Lorenzo & Viglia, Giampaolo & Nieto-Garcia, Marta, 2020. "Strategic consumer behavior in online hotel booking," Annals of Tourism Research, Elsevier, vol. 83(C).
    3. Ibrahim Mohammed & Basak Denizci Guillet & Rob Law & Wassiuw Abdul Rahaman, 2021. "Predicting the direction of dynamic price adjustment in the Hong Kong hotel industry," Tourism Economics, , vol. 27(2), pages 346-364, March.
    4. Taotao Deng & Chen Gan & Yukun Hu, 2021. "Do hotel business benefit from increased tourist accessibility? Evidence from China’s high-speed railway program," Tourism Economics, , vol. 27(7), pages 1357-1374, November.
    5. Zhihua Zhang & Rachel J. C. Chen & Lee D. Han & Lu Yang, 2017. "Key Factors Affecting the Price of Airbnb Listings: A Geographically Weighted Approach," Sustainability, MDPI, vol. 9(9), pages 1-13, September.
    6. Augusto Voltes-Dorta & Federico Inchausti-Sintes, 2021. "The spatial and quality dimensions of Airbnb markets," Tourism Economics, , vol. 27(4), pages 688-702, June.
    7. 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.
    8. Garača Vuk & Vukosav Svetlana & Stamenković Igor & Košić Kristina & Bradić Milan, 2020. "The Impact of New Global Economic Crisis on the Social Function of Spas and Climatic Resorts in Serbia," Economic Themes, Sciendo, vol. 58(2), pages 255-273, June.
    9. 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.
    10. Josep Lladós-Masllorens & Antoni Meseguer-Artola & Inma Rodríguez-Ardura, 2020. "Understanding Peer-to-Peer, Two-Sided Digital Marketplaces: Pricing Lessons from Airbnb in Barcelona," Sustainability, MDPI, vol. 12(13), pages 1-19, June.
    11. Lawani, Abdelaziz & Reed, Michael R. & Mark, Tyler & Zheng, Yuqing, 2019. "Reviews and price on online platforms: Evidence from sentiment analysis of Airbnb reviews in Boston," Regional Science and Urban Economics, Elsevier, vol. 75(C), pages 22-34.
    12. Ante Mandić & Lidija Petrić, 2021. "The impacts of location and attributes of protected natural areas on hotel prices: implications for sustainable tourism development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 833-863, January.
    13. Yang Yang & Zhenxing (Eddie) Mao, 2019. "When ‘spatial’ means special: Special issue on spatial economics and tourism development," Tourism Economics, , vol. 25(8), pages 1145-1149, December.
    14. Aldric Vives & Marta Jacob & Marga Payeras, 2018. "Revenue management and price optimization techniques in the hotel sector," Tourism Economics, , vol. 24(6), pages 720-752, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Loïc Lévi & Jean Jacques Nowak & Sylvain Petit & Hakim Hammadou, 2022. "Industrial legacy and hotel pricing: An application of spatial hedonic pricing analysis in Nord-Pas-de-Calais, France," Tourism Economics, , vol. 28(4), pages 870-898, June.
    2. Latinopoulos, Dionysis, 2018. "Using a spatial hedonic analysis to evaluate the effect of sea view on hotel prices," Tourism Management, Elsevier, vol. 65(C), pages 87-99.
    3. David Boto-García & Veronica Leoni, 2023. "The Economic Value of Coastal Amenities: Evidence from Beach Capitalization Effects in Peer-to-Peer Markets," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(2), pages 529-557, February.
    4. Hernández, Juan M. & Suárez-Vega, Rafael & Santana-Jiménez, Yolanda, 2016. "The inter-relationship between rural and mass tourism: The case of Catalonia, Spain," Tourism Management, Elsevier, vol. 54(C), pages 43-57.
    5. Luigino Baldassin & Massimo Gallo & Elena Mattevi, 2017. "Tourism in European cities," Tourism Economics, , vol. 23(1), pages 3-28, February.
    6. Abrate, Graziano & Viglia, Giampaolo, 2016. "Strategic and tactical price decisions in hotel revenue management," Tourism Management, Elsevier, vol. 55(C), pages 123-132.
    7. de la Peña, Mario Raúl & Núñez-Serrano, Juan A. & Turrión, Jaime & Velázquez, Francisco J., 2016. "Are innovations relevant for consumers in the hospitality industry? A hedonic approach for Cuban hotels," Tourism Management, Elsevier, vol. 55(C), pages 184-196.
    8. Hakim Hammadou & Lévi Loïc & Jean Jacques Nowak & Sylvain Petit, 2018. "The prices of public goods and public bads for hotel rooms in Nord-Pas de Calais, France," Working Papers hal-01831534, HAL.
    9. David Boto-García & Veronica Leoni, 2022. "The hedonic value of coastal amenities in peer-to-peer markets," DEA Working Papers 94, Universitat de les Illes Balears, Departament d'Economía Aplicada.
    10. Evangelinos, Christos & Obermeyer, Andy & Bartel, Aaron, 2020. "The individual monetary valuation of online hotel ratings," IU Discussion Papers - Hospitality, Tourism & Event 3/2020, IU International University of Applied Sciences.
    11. de Oliveira Santos, Glauber Eduardo, 2016. "Worldwide hedonic prices of subjective characteristics of hostels," Tourism Management, Elsevier, vol. 52(C), pages 451-454.
    12. Ante Mandić & Lidija Petrić, 2021. "The impacts of location and attributes of protected natural areas on hotel prices: implications for sustainable tourism development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 833-863, January.
    13. Alegre, Joaquín & Cladera, Magdalena & Sard, Maria, 2013. "Tourist areas: Examining the effects of location attributes on tour-operator package holiday prices," Tourism Management, Elsevier, vol. 38(C), pages 131-141.
    14. Natalia Porto & Manuela Cerimelo & Iván Albina & Juan Luis Schiavonni & Francisco Pizzi, 2020. "Atributos, puntuacion y precios hedonicos en la Provincia de Buenos Aires y CABA: un analisis basado en Booking y Airbnb," Asociación Argentina de Economía Política: Working Papers 4392, Asociación Argentina de Economía Política.
    15. Amanda Belarmino & Tevfik Demirciftci & Liheng Zhang, 2021. "Online reviews and travel magazine awards: their influence on willingness-to-pay," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 20(4), pages 436-445, August.
    16. Josep Maria Espinet & Ariadna Gassiot-Melian & Ricard Rigall-I-Torrent, 2020. "An analysis of price segmentation in the cruise industry," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 19(3), pages 162-189, June.
    17. Solano Sánchez, Miguel Ángel & Núñez Tabales, Julia M. & Caridad y Ocerin, José M., 2021. "Un modelo hedónico para los alquileres turísticos en la ciudad de Sevilla. || A hedonic model for the vacation rentals in the city of Seville," Revista de Métodos Cuantitativos para la Economía y la Empresa = Journal of Quantitative Methods for Economics and Business Administration, Universidad Pablo de Olavide, Department of Quantitative Methods for Economics and Business Administration, vol. 31(1), pages 144-160, June.
    18. Chunfang Zhao & Yingliang Wu & Yunfeng Chen & Guohua Chen, 2023. "Multiscale Effects of Hedonic Attributes on Airbnb Listing Prices Based on MGWR: A Case Study of Beijing, China," Sustainability, MDPI, vol. 15(2), pages 1-21, January.
    19. Ante Mandić & Elza Jurun, 2018. "The Determinants of Small and Family Owned Hotel Room Rates," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 11(2), pages 17-22, September.
    20. Fleischer, Aliza, 2012. "A room with a view—A valuation of the Mediterranean Sea view," Tourism Management, Elsevier, vol. 33(3), pages 598-602.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:touman:v:56:y:2016:i:c:p:40-51. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/tourism-management .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.