EFFECTS OF HERITAGE VALUE ON HOTEL ROOM RATES

Abstract

World Heritage Sites are increasingly used as a focal point in national tourism campaigns because of their increased international visibility in promotional and informational material generated by the private sector, host countries, as well as the World Heritage Committee. This study extends the body of literature on World Heritage Sites. It introduces the concept of heritage value and investigates if a site’s heritage value has a significant impact on room rates of hotels serving the site. It reinforces prior research findings on hotel attributes having an impact on hotel room rates. The research proceeds with the collection and analysis of data on four and five star hotel room rates in Cambodia (Siem Reap and Phnom Penh) and Thailand (Phuket and Bangkok). The results show that Siem Reap’s hotel rates were charged at a premium compared to Phnom Penh’s. However, through the inter-country regression, Thailand hotel rates were found to be much higher than those in Cambodia. As such, when hotel rates from Siem Reap, Phnom Penh,Phuket and Bangkok were regressed, this slight premium becomes statistically insignificant as the difference is not huge enough to justify a premium against Phuket and Bangkok’s rates. This finding reduces the information asymmetry pertaining to using hedonic pricing models in the hotelindustry. Furthermore, it presents empirical evidence to both current and potential hoteliers intending to leverage on World Heritage Sites.