Look before you leap: Comparison and profiles of hotel price determinants in four European markets

Abstract

Pricing in the hospitality industry moves between adapting to a global demand and the need to manage locally. This double-edged challenge requires a managerial response based on flexibility and variety but one which is constrained by resources and competitive conditions. Since the sensitivity of each determinant may be different across types of hotels and countries, how hotel managers reach their compromises between determinants and countries remains an unsettled issue. Based on cross-nation methodology, we carry out a comparative analysis of price determinants from hotels in four main international tourist countries. The set of hypotheses developed are tested by estimating a quantile hedonic regression model with data from hotels in four countries. Results indicate that outcomes of pricing decisions differ by the country-of-operation, yielding a managerial profile per country. Also, the study estimates the contribution of the country to hotel pricing.