Prices of short-stay accommodation: time series of a eurozone country

Abstract

Purpose This paper aims to provide a reliable statistical model for time-series prices of short-stay accommodation and overnight stays in a eurozone country. Design/methodology/approach Exploiting the unit root feature, the cointegrated vector autoregressive model solves the problem of misspecification. Subsequently, variables are modelled for a long-run equilibrium with included deterministic variables. Findings The empirical results confirmed that overnight stays for foreign tourists were positively associated with the prices of short-stay accommodation. Research limitations/implications The major limitation lies in the data vector and its time horizon; its extension could provide a more specific view. Practical implications Findings can assist practitioners and hotel executives by providing the information and rationale for adopting seasonal volatility pricing. Structural breaks in price time-series have practical implications for setting seasonal-pricing schemes. Tourists could benefit either from greater price stability or from differentiated seasonal prices, which are important in the promotion of the price attractiveness of the tourist destination. Originality/value The originality of the paper lies in the applied unit root econometrics for tourism price time-series modelling and the prediction of short-stay accommodation prices.