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Is There an Economic Rent for Island Hotels?

Author

Listed:
  • Juan Prieto-Rodriguez

    (Department of Economics, University of Oviedo, Avda del Cristo, s/n, 33006 Oviedo, Spain)

  • Manuel Gonzalez-Díaz

    (Department of Business Administration, University of Oviedo, Spain)

Abstract

This paper examines whether there is an ‘insular rent’ for Spanish hotels. The authors look at whether the hotels located in the Balearic and Canary Islands establish higher prices once quality has been controlled. They use quantile regression because it has informational advantages, given that independent variable effects are not constant along the hotel price distribution. The main result is that, once quality is taken into account, it seems there is a positive rent for island hotels. However, this rent is highly related to a hotel brand name effect. It seems that the hotel brand name reduces consumer information asymmetry problems by signalling higher quality standards or reducing the variance in the quality of a hotel given its ex ante known characteristics.

Suggested Citation

  • Juan Prieto-Rodriguez & Manuel Gonzalez-Díaz, 2008. "Is There an Economic Rent for Island Hotels?," Tourism Economics, , vol. 14(1), pages 131-154, March.
    • Handle: RePEc:sae:toueco:v:14:y:2008:i:1:p:131-154
    DOI: 10.5367/000000008783554839
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    References listed on IDEAS

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    Cited by:

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    2. Calogero Guccio & Domenico Lisi & Marco Martorana & Anna Mignosa, 2017. "On the role of cultural participation in tourism destination performance: an assessment using robust conditional efficiency approach," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 41(2), pages 129-154, May.

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