Is There an Economic Rent for Island Hotels?

Juan Prieto-Rodriguez () and Manuel Gonzalez-Díaz
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Manuel Gonzalez-Díaz: Department of Business Administration, University of Oviedo, Spain

Tourism Economics, 2008, vol. 14, issue 1, 131-154

Abstract: This paper examines whether there is an ‘insular rent’ for Spanish hotels. The authors look at whether the hotels located in the Balearic and Canary Islands establish higher prices once quality has been controlled. They use quantile regression because it has informational advantages, given that independent variable effects are not constant along the hotel price distribution. The main result is that, once quality is taken into account, it seems there is a positive rent for island hotels. However, this rent is highly related to a hotel brand name effect. It seems that the hotel brand name reduces consumer information asymmetry problems by signalling higher quality standards or reducing the variance in the quality of a hotel given its ex ante known characteristics.

Keywords: island tourism; pricing strategy; hotel location; quality signals; Spain (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:14:y:2008:i:1:p:131-154

DOI: 10.5367/000000008783554839

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