ESTIMATING ROOM RENTS FOR VARIOUS HOTELS ACROSS INDIA

Abstract

The paper exposes the economic viability of the Indian Hotel Industry by employing primary data taken from Hotels.com website. The paper focusses to build a relationship between hotel prices and various explanatory variables like hotel star rating, city population and distance from the airport. Apart from these regressors we used some dummy variables like availability of swimming pool, whether free wifi available, free breakfast, whether city is a metro city, whether city is a tourist destination and is the day weekend. After our analysis we found that whether the city is metro city & is the day a weekend comes out to be insignificant variables. As we are using more than 10 regressors, we have a problem of multicollinearity. Also, the data is taken from hotels from 18th Dec 2016 to 08th Jan 2017. There can be a problem of Autocorrelation but we found an insignificant relation as the time series data is only for 8 days. On the whole, our study shows that hotel rate in India is dependent mainly on traditional factors like star ratings and availability of breakfast and wifi.