Exploring the impact of hotel attributes and services on price and revenue: A hedonic pricing model approach with a focus on internal and external segmentation and repeat customers

Abstract

Hedonic pricing (HP) models are widely used to capture the price heterogeneity of hotel attributes and complementary services. This study uses a broad-ranging database with information about 11 hotels, located in the same Majorcan (Spain) coastal town, to identify the main attributes, complementary services and guest characteristics that affect hotel pricing, hotel revenue (RevPAR) and repeat stays. The results found that, aside from the main sources of price variability, such as accommodation type, location and season, other hotel attributes/services were found to influence these dependent variables: refurbishments, room type, occupancy level, number of stars, clients’ online ratings and the specific hotel. Attributes/services did not have a homogeneous effect on the three types of models estimated, as some attributes increased prices without increasing RevPAR or number of repeat stays.