Determinants of hotel room price in Penang, Malaysia: Evidence from multiple linear regression and quantile regression

Abstract

Since Penang, Malaysia was recognized and given World Heritage status by UNESCO in year 2008, the growth in tourist arrivals has been found increasing. More hotels are seen mushrooming to accommodate for the increasing number of hotel guests. Surprisingly, hotel room price in Penang are found to vary largely across different hotels despite the close proximity. This study aims to examine the significant hotel attributes associated with the hotel room price in Penang. The data are about 83 different hotels in Penang and are obtained from an internet hotel reservation website and the attribute, lowest hotel room price is used as the dependent variable. The results of the analysis show that multiple linear regression and quantile regression share common characteristics and differences in some aspects. The empirical results are hoped to serve as a reference for hoteliers to develop effective strategies to maximize hotel revenue.