Pricing Strategy for a Smart-Tourist Area: Does Location Matters?

Abstract

This study aims to investigate the effect of hotel characteristics, particularly their locations, on room pricing strategy for hotels in the Bogor Area, Indonesia. The author applies the quantile hedonic regression model on a dataset of Bogor Hotels collected through a travel agent’s website. A total of 194 hotels were collected and used as data samples. Our findings suggest that locations near tourist attractions are a significant factor in explaining hotel room prices in the Bogor area, while in contrast, the city center location is not. In addition, we also find that hotel room size and stars-awarded have significant positive effects on room rates. The outcomes of this study advocate for the continuation of fine-tuning the existing pricing strategy adopted by hoteliers to optimize revenue.