Incorporating heterogeneity of travelers’ preferences into the overall hostel performance rating

Marija Kuzmanović,Milena Vukić

doi:10.31181/dmame210402200k

Abstract

Hostels have become a very popular form of accommodation and their varieties have grown steadily in recent years. To ensure the sustainability of this business model, it is necessary to understand the main drivers influencing travelers to choose a hostel accommodation. For this purpose, we conducted an online survey using convenience sampling and purposive sampling techniques. Respondents' preferences to six hostel attributes (cleanliness, location, staff, atmosphere, facilities, and cancellation policy) were determined using discrete choice analysis. Sample results showed that the most important attributes are cleanliness and location, while the atmosphere is the least important one. However, widespread heterogeneity in preferences was observed, and cluster analyzes identified three distinct groups of travelers: “cleanliness sticklers”, “location demanders” and “party seekers”. Facilities and atmosphere were found to be very important attributes for particular clusters. These findings can help design a marketing strategy for each of the identified segments to ensure sustainable business. Finally, we have proposed a new approach to calculating the hostel overall rating based on attribute importance, which shows much better discriminatory power compared to the traditional average-based approach.

Highlights

Over the last six decades, tourism industry become one of the largest economic sectors in the world (Mihalic, 2014)
Discrete Choice Analysis (DCA) is theoretically grounded in random utility theory (RUT) and relies on the assumptions of economic rationality and utility maximization (Ben-Akiva & Lerman, 1985; Mangham et al, 2009), and assumes heterogeneity in decision-maker and choice alternatives (Oppewal et al, 2015)
Bearing in mind that the hostel market is rapidly developing by increasing its diversity, and that it attracts a growing number of guests, usually Millennials, and investors, it is not surprising that the number of studies related to this market is on the rise

Summary

Introduction

Over the last six decades, tourism industry become one of the largest economic sectors in the world (Mihalic, 2014). Further strong growth of the tourism industry around the world was expected, but the appearance of the COVID-19 pandemic temporarily hindered it. Farr (2020) states that after the end of the pandemic, it will take about 18 to 24 months for daily tourist activities to return to the level before the pandemic (Nguyen, 2020)

Methods

Results

Conclusion