Examining the determinants of room rates for hotels in capital cities: The Oslo experience

Price hedonic theory states that the price for a product may be thought of as an additive function of the various utility-bearing attributes embedded in the product. Within this framework, the present study demonstrates how the room rates for hotels in and around the Norwegian capital of Norway can be linked to certain hotel attributes. Seemingly unrelated regression (SUR) models incorporating nine hotel attributes explain about 70% of the variation in room rates. Of particular importance in this respect, are the attributes mini-bar, hairdryer, free parking and distance to downtown.