Hedonic Estimates of Lodging Rates in the Four Corners Region
In many industries, insufficient attention has been given to how location affects prices. One such industry is lodging. This article examines room rates for budget hotels and motels in four southwestern U.S. states during 1998. Using hedonic analysis, published prices are estimated for nearly 600 establishments belonging to six national chains. OLS regression uncovers how site attributes (pools, spas, and complimentary breakfasts) and situation attributes (temperature, interstate location, and specialization of the local economy) affect room rates. Prices for overnight stays during summer and winter seasons are examined. Differential effects of site and situation attributes on price heterogeneity are discussed.