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

Authors: Jinwon Kim*, University of Florida, Seongsoo Jang, Cardiff University, Seunghyun Kim, Michigan State University
Topics: Tourism Geography, Economic Geography, Spatial Analysis & Modeling
Keywords: Hotel room prices, spatial hedodnic pricing model, geographically weighted regression, Chicago
Session Type: Paper
Day: 4/6/2019
Start / End Time: 5:00 PM / 6:40 PM
Room: Congressional A, Omni, West
Presentation File: No File Uploaded


Despite abundant research on modeling hotel room prices, traditional hedonic pricing methods (HPMs) have failed to consider spatial variations in the relationships among hotel room price and attribute variables. This study demonstrated the utility of a spatial HPM (s-HPM) using 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 hotel room prices, ultimately providing guidance for effective location-based hotel room pricing strategies.

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