Modeling hotel room pricing: A multi-country analysis

Abstract

In the current tourism landscape, pricing decisions reemerge as a key concern for hoteliers. This study examines the impact of specific factors associated with hotels, customers’ experience, and competition on hotel pricing in different countries. Certain features of market behavior can distort expected prices, such as asymmetric information, differences in hotel categorization, hotels spatial concentration or electronic word-of-mouth (eWOM). In order to understand the determinants of pricing and to obtain a complete characterization of them, the present study applies quantile regression to the prices of a sample of 3800 hotels located in France, Spain, Italy and the United Kingdom. Results show the heterogeneity of the effects of hotel category, country location, eWOM and hotel competitive intensity across different price levels. Also, hotels concentration proves to have a generally positive effect on price, confirming positive effects of spatial concentration.