Cruise tourism: a hedonic pricing approach

Abstract

Purpose The purpose of this paper is to examine the effect on price of different cruise industry characteristics from the point of view of actual prices. The analysis is carried out from the supply side but taking into account the real prices paid by customers. Design/methodology/approach This paper uses the hedonic price methodology. To develop this research, a database of more than 36,000 prices paid by cruise passengers and different characteristics of ships in 2013 was built. To obtain the results, ten models have been developed with significant adjusted R2 of between 0.85 and 0.93 making the models and results robust. Findings The results show that the main attributes affecting prices are the number of nights of the itinerary, the departure date, the number of days before departure the booking is made, the accommodation type and some facilities, such as casinos, cinemas and swimming pools. The results also yield a ranking of ship companies based on price and quality dimensions. Finally, the authors suggest some implications for management and new research. Originality/value This paper offers a new approach in the academic literature of the cruise industry in two respects. First, in its use of a broad database of actual prices paid by passengers – more than 36,000 observations. Second, in the application of the hedonic pricing methodology, widely used in the tourism sector (see the Methodology and Database section) but until now not in the cruising segment.

Estimating the price range and the effect of price bundling strategies

“…Price has a significant role in all industries, including in the tourism and hospitality industries (Espinet-Rius et al, 2018;Moro et al, 2017Moro et al, , 2018. As a core of any marketing strategy (Moro et al, 2017), the importance of pricing is reflected in firms' profitability 2.…”

Influence of satiation on consumer behavior in hospitality

“…We have not verified the hypothesis regarding the number of nights booked , but instead found a positive linear effect, which can be explained by the strategies carried out by the bidders who partially contradict the H4 statement. Hotels and cruise ship companies act contrary to customers' beliefs to charge a higher price per night on average; the greater the number of days booked (Bigne et al, 2021; Espinet‐Rius, 2018; Espinet‐Rius, Fluvià‐Font, et al, 2018; Riasi et al, 2017), the greater the internal reference price, and thus WTP (Nieto‐García et al, 2017).…”

A note on the contribution of Valuation economics in tourism

“…More specifically, the study by Thinh et al, (2018) Hernández (2016) who study the interrelationship between rural and mass tourism, Tsai et al, (2016) study the impact of tourism resources on tourism real estate value, Wang et al, (2016) investigate the effect of a coastal park's attributes on its entrance fees and many other studies on a variety of tourist property prices on relation to the characteristics of property, community and environment. Espinet-Rius et al (2018) use HP to value cruise tourism and Fonner and Berrens (2014) to value lift tickets for US alpine ski areas and the effect of congestion.…”

“…The results from this study indicate that spatial variability on the effect of sea view to room rates and local natural and or tourism resources have a substantial role in aesthetic values. Other examples of studies areEspinet-Rius et al, (2018) who valuate cruise tourism,…”