When quality signals talk: Evidence from the Turin hotel industry

Graziano Abrate, Antonella Capriello and Giovanni Fraquelli

Tourism Management, 2011, vol. 32, issue 4, 912-921

Abstract: This study analyzes the relationship between quality signals and price setting through the application of hedonic price functions. The model proposals also include variables relating to land use policies and tourism development strategies. A simultaneous equation model endogenously estimates quality signals. This method is appropriate for analyzing emerging urban destinations, as characterized by the presence of an expanding hotel industry. The results are based on a dataset of 145 hotels in Turin, Italy. The empirical findings reveal that reputation-based quality signals help explain tariff levels. Price proposals also include a premium for quality assured hotels, defining some limits of the current hotel classification system. The empirical evidence has significant marketing implications for the hospitality industry’s competitiveness, since the results clarify the impact of quality signals on price level.

Keywords: Hedonic price; Quality signals; Price strategy; Quality assurance programs (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (33)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:touman:v:32:y:2011:i:4:p:912-921

DOI: 10.1016/j.tourman.2010.08.006

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