Abstract
ABSTRACT Vacation homes emerged as an alternative accommodation sector with strong growth potential in small island destinations. As tourists scrutinize vacation home features, bundling their best attribute sets materializes as a critical strategy for vacation home developers. This study examined tourist preferences for vacation homes in Aruba, employing a choice experiment analysis. The experiment centered on location, price, unit type, amenities, and services. Based on identified preferences, the study applied a market simulator to uncover which combination of attributes carries the most impact on a vacation home purchase. The results suggest that the best combination involves location and price, which reveals a polynomial function anchoring a direct negative relationship between location and price. As the location moves further away from the tourist core area (i.e. the beach), the price elasticity of potential vacation owners also increases. Location seems to be a product-differentiating characteristic, which influences consumer utility and shapes demand.
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