How do hotels choose their location? Evidence from hotels in Beijing

Abstract

This study aims to investigate potential factors contributing to the hotel location choice by an ordered logit model incorporating both hotel and location characteristics. The results suggest that, star rating, years after opening, service diversification, ownership, agglomeration effect, public service infrastructure, road accessibility, subway accessibility, and accessibility to tourism sites are important determinants. By examining location models for different periods, different star rating levels, and different ownership, we show that, downscale hotels tend not to actively seek the benefits of agglomeration effects while upscale ones are more sensitive to accessibility. Finally, agglomeration effects are further investigated by looking into agglomeration heterogeneity, agglomeration scope, scale related and ownership related agglomeration, and agglomeration zoning.