The influence of hotel attributes on room rates: the case of Bucharest

Abstract

Located in the southeast of Romania, Bucharest is the capital and the largest city in the country. Economically, Bucharest is the most prosperous city in Romania. During the last years, this city faced one of the highest growths in the number of hotels. Nowadays, due to the development of Internet-based technologies, the reservation process has changed; travelers can easily get information about the experience of other guests and also compare prices. The aim of the present paper is to analyze how prices for a hotel stay, in the city of Bucharest, can be influenced by some quality signaling factors, as star rating, online consumer’s ratings and the number of consumer’s comments. By using a multiple regression model for 3 to 5-star hotels in Bucharest, we identify, on one hand, the factors that have a positive influence on hotel room rates and, on the other hand, the factors that have a negative impact on the consumer’s willingness to pay. Our main results supply signals to hoteliers concerning the attributes most valuable for consumers which can lead to a higher room rate premium.