Online hotel ratings and its influence on hotel room rates: the case of Lisbon, Portugal

Authors

Keywords:

Online hotel ratings, hedonic prices, Lisbon hotels, Booking.com

Abstract

Lisbon is one of the European Union cities that has one of the highest growth in the number of hotels. With the digital revolution travelers can easily not only compare prices but also get information about the experience of other guests which can influence prices. The aim of this paper is to analyze how prices for a hotel stay can be influenced by some quality signaling factors, as star rating and online consumer’s ratings (location, cleanliness, comfort, facilities, staff and value for money, available on Booking.com), the volume of consumer’s comments and the availability of rooms in Lisbon. For 151 hotels in Lisbon, from 3 to 5 stars, through a multiple regression model, the results suggest that hotel category, location and facilities ratings have a positive influence on hotel room rates, but higher trade-off between what clients pay and the guest hotel stay experience has a negative impact on the consumer’s willingness to pay, as well as the number of comments. Among different hotel categories, the influent factors are different. Our main findings provide signs to hoteliers to take corrective actions towards the attributes most valuable for consumers and that can provide a higher room rate premium. 

Author Biographies

  • Conceição Castro, Porto Accounting and Business School of Polytechnic of Porto; CEPESE

    Conceição Castro, PhD, is an Adjunct Professor in the Department of Economics at the School of Accounting and Administration of Porto of the Polytechnic Institute of Oporto (Portugal). She holds a PhD in Management. Is a Research Associate of CEPESE - Centro de Estudos de População Economia e Sociedade, an inter-university research centre established by the University of Porto and the Foundation Engº António de Almeida.

  • Fernanda A. Ferreira, School of Hospitality and Tourism of Polytechnic Institute of Porto, Portugal. Applied Management Research Unit (UNIAG)

    Fernanda A. Ferreira is a Professor in the Department of Mathematics at the School of Hospitality and Tourism of Polytechnic Institute of Porto, Portugal. She obtained B.S. in Mathematics and PhD in Applied Mathematics from University of Porto. She has published journal and conference papers. Fernanda Ferreira is member of the Applied Management Research Unit (UNIAG). Her research interests include industrial organization, game theory and tourism.

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Published

28.02.2018

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Section

Tourism/Hospitality: Research Papers

How to Cite

Castro, C., & Ferreira, F. A. (2018). Online hotel ratings and its influence on hotel room rates: the case of Lisbon, Portugal. Tourism & Management Studies, 14(1), 63-72. https://tmstudies.net/index.php/ectms/article/view/1024