A Hedonic Pricing Analysis of Hotel Room Rates in Bangkok

Abstract

      Despite the ongoing global financial slowdown and a series of natural disasters that have taken place in Thailand, Bangkok still ranks high on the list of top tourist destinations in terms of the number of international visitors. This dramatic increase in the number of international tourist arriving in Bangkok benefitted the hotel industry in Bangkok and brought about huge revenue earnings for the country. This study analyzed the status of Bangkok hotel room rates, differentiated by hotel characteristics. Using a hedonic pricing method, this study based its analysis on the data obtained from online hotel reservations for 141 different Bangkok hotels.

The findings showed that the general room rates charged by hotel chains were approximately 32% higher than independent hotels. During high seasons, the weekend room prices charged by hotel chains were higher if the room had larger space and if the hotel was located closer to the city center. Regardless of seasonality, any new hotel chain located near the Bangkok city center that also had its own bar and restaurant facility, charged weekend room rates that were higher than older chain hotels,  located further from the city center, and without bar and restaurant facilities. This study also noted in particular how accessibility to the Bangkok Mass Transit System (BTS Sky Train) and proximity to the city center affected hotel pricing, coming to the conclusion that any hotel in Bangkok located either near a BTS station or the city center charged room rates much higher than hotels located further away.