Market accessibility and hotel prices in the Caribbean: The moderating effect of quality-signaling factors

Keywords

Hedonic price model; Caribbean hotels; Market accessibility; Quality-signaling factor; Mixed-effect linear regression

Abstract

The purpose of the paper is to investigate the influence of market accessibility on hotel prices and how this influence is moderated by various quality-signaling factors, such as online user ratings, “thumbs up” (recommendation) percentage, hotel class, and chain affiliation. Using a randomized sample of hotels in the Caribbean islands, we employ a three-level mixed-effect linear regression model to investigate the plausible relationship between market accessibility and hotel prices. After controlling for unobserved island-level and hotel-level characteristics, the model indicates that in most periods, low market accessibility (high flight costs) leads to lower hotel prices, and this influence is mitigated by well-established positive reputations as represented by the quality-signaling factors. Our findings imply that hotels should work to increase their reputations to help buffer the impacts of inaccessibility. In an effort to increase market accessibility, one course of action is to reduce airport landing taxes and fees.

Publication Date

1-1-2016

Original Citation

Yang, Y., Mueller, N., & Croes, R. (2016). Accessibility and hotel prices in the Caribbean: The moderating effect of quality-signaling factors. Tourism Management, 56, 40-51.

Number of Pages

40-51

Document Type

Paper

Language

English

Source Title

Tourism Management

Volume

56

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

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