Site and Situation Determinants of Hotel Room Rates

Abstract

This thesis analyzes the variation of hotel room rates at two different geographic scales. At the regional scale, 1998 data from nearly 600 hotels in Arizona, Colorado, New Mexico, and Utah are examined. At the local scale, data for 98 hotels in Tucson, Arizona are analyzed. This thesis argues that both non-spatial and spatial attributes influence the observed price variation in hotel rooms. This issue can be examined in the context of site and situation, traditional geographic concepts that refer to characteristics at a specific location and characteristics relative to that specific location, respectively. Hedonic price functions are used to estimate implicit prices for hotel site and situation attributes. In general, both sets of findings demonstrate that the heterogeneity of hotel room rates is best explained by a combination of nonspatial and spatial variables. This research reveals that site and situation attributes are systematically reflected in hotel room rates.