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Predicting random level and seasonality of hotel prices. A structural equation growth curve approach

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  • Coenders, Germà
  • Espinet, Josep Maria
  • Saez, Marc

Abstract

This article examines the effect on price of different characteristics of holiday hotels in the sun-and-beach segment, under the hedonic function perspective. Monthly prices of the majority of hotels in the Spanish continental Mediterranean coast are gathered from May to October 1999 from the tour operator catalogues. Hedonic functions are specified as random-effect models and parametrized as structural equation models with two latent variables, a random peak season price and a random width of seasonal fluctuations. Characteristics of the hotel and the region where they are located are used as predictors of both latent variables. Besides hotel category, region, distance to the beach, availability of parking place and room equipment have an effect on peak price and also on seasonality. 3-star hotels have the highest seasonality and hotels located in the southern regions the lowest, which could be explained by a warmer climate in autumn.

Suggested Citation

  • Coenders, Germà & Espinet, Josep Maria & Saez, Marc, 2001. "Predicting random level and seasonality of hotel prices. A structural equation growth curve approach," Working Papers of the Department of Economics, University of Girona 1, Department of Economics, University of Girona.
    • Handle: RePEc:udg:wpeudg:001
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    References listed on IDEAS

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    1. 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..
    2. Peter Taylor, 1995. "Measuring Changes in the Relative Competitiveness of Package Tour Destinations," Tourism Economics, , vol. 1(2), pages 169-182, June.
    3. Albert Satorra, 1991. "Asymptotic robust inferences in the analysis of mean and covariance structures," Economics Working Papers 3, Department of Economics and Business, Universitat Pompeu Fabra.
    4. Cassel, Eric & Mendelsohn, Robert, 1985. "The choice of functional forms for hedonic price equations: Comment," Journal of Urban Economics, Elsevier, vol. 18(2), pages 135-142, September.
    5. Bengt Muthén, 1989. "Latent variable modeling in heterogeneous populations," Psychometrika, Springer;The Psychometric Society, vol. 54(4), pages 557-585, September.
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    Citations

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    Cited by:

    1. 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.
    2. Núñez-Serrano, Juan A. & Turrión, Jaime & Velázquez, Francisco J., 2014. "Are stars a good indicator of hotel quality? Assymetric information and regulatory heterogeneity in Spain," Tourism Management, Elsevier, vol. 42(C), pages 77-87.
    3. Kim, Jinwon & Jang, Seongsoo & Kang, Sanghoon & Kim, SeungHyun (James), 2020. "Why are hotel room prices different? Exploring spatially varying relationships between room price and hotel attributes," Journal of Business Research, Elsevier, vol. 107(C), pages 118-129.
    4. José Francisco Perles Ribes & Luis Moreno Izquierdo & Ana Ramón Rodríguez & María Jesús Such Devesa, 2018. "The Rental Prices of the Apartments under the New Tourist Environment: A Hedonic Price Model Applied to the Spanish Sun-and-Beach Destinations," Economies, MDPI, vol. 6(2), pages 1-9, April.
    5. Josep Mª Espinet Rius, 2018. "Global and local pricing strategies in the cruise industry," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(5), pages 329-340, October.
    6. 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.
    7. Abrate, Graziano & Viglia, Giampaolo, 2016. "Strategic and tactical price decisions in hotel revenue management," Tourism Management, Elsevier, vol. 55(C), pages 123-132.
    8. Viglia, Giampaolo & Abrate, Graziano, 2017. "When distinction does not pay off - Investigating the determinants of European agritourism prices," Journal of Business Research, Elsevier, vol. 80(C), pages 45-52.
    9. Josep Raya Vilchez, 2013. "Destination and Seasonality Valuations: A Quantile Approach," Tourism Economics, , vol. 19(4), pages 835-853, August.

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    More about this item

    Keywords

    Hedonic functions; hotel pricing; growth curve models; random-effect models; structural equation models;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism

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