Using a spatial hedonic analysis to evaluate the effect of sea view on hotel prices

Abstract

This paper attempts to examine the effect of sea view to room rates alongside other structural and locational attributes. Specifically, it aims to test whether rooms with a sea view are priced higher than others, thus trying to quantify the associated aesthetic values of coastal areas where tourism-related development is a key economic activity. For this purpose, a sample of 557 rooms in Halkidiki, Greece was collected through an online database during the summer tourist season. Subsequently, these data were integrated into a GIS-system in order to apply a spatial hedonic model. A semi-parametric geographically weighted regression model was used to assess the local effects, as well as, to investigate the spatial variability of the selected attributes. The results exhibited a significant spatial variability concerning the effect of sea view to room rates, indicating that local natural and/or tourism resources may have a substantial role in aesthetic values.