Abstract
The application of price hedonic theory in the hotel pricing domain has relatively ignored the destination and country-level differences. We compare hotel rents across tourist and non-tourist destinations for an emerging (India) and a developed (USA) market. Utilizing multiple regression on a combined dataset of 21,904 data points spread over 2458 unique hotels, we show that the nature of destination and market moderates the association between hotel attributes and rents. Further, the results show that hotels at tourist destinations enjoy a rent premium across markets. However, this rent premium is positively associated with star rating, only in emerging markets, and is stable in developed markets. We contribute to price hedonic theory by proposing destination and market variables as moderators. Globalization and industry concentration make location decisions recurring and flexible. The study aims to help hotel managers by providing a contextual framework for making these strategic investment decisions.
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