The Prediction Model for Average Daily Rate (ADR) For a Sample of Three-Star Hotels in Bangkok

  • Warakorn Likitanupak Faculty of Architecture and Planning, Thammasat University
  • Kongkoon Tochaiwat Faculty of Architecture and Planning, Thammasat University
Keywords: Average Daily Rate (ADR), three-star hotels, Bangkok, Hedonic Price Model, Multiple Regression Analysis

Abstract

The main objective of this research was to propose an Average Daily Rate (ADR) prediction model for three-star hotels in Bangkok using Hedonic Price Model. The variables in the model were derived from literature review and suggested by an expert panel. Factor Analysis was adopted to merge the highly correlated variables. The data from two hundred and twenty three hotels in Bangkok were collected, after removing outlier data. The results showed that there are eight variables affecting ADR and the five variables that have the highest regression coefficients were: 1) score of location overview, 2) swimming pool availability (has or has not), 3) score of room comfort, 4) score of staff performance and 5) hotel located in CBD (yes or no). After testing for the best fit model, the log-linear model was selected because of its highest Adjusted R2 (AdjustedR2 = 0.548). The verification of the model was conducted by pair sample t-tests method. The results showed that the observed ADRs and the predicted ADRs from the proposed model were not significantly different, as shown from the p-value of 0.306 at 0.05 significance level. Furthermore, Theil’s U statistic was 0.516. This showed that the proposed model can be used in order to provide useful information for investors or developers regarding hotel value appraisal, or pricing hotel’s room rates. Finally, it should be noted that the ADR of three-star hotels used in this research were between 700 and 4,983 Baht/room/night with average ADR of 1,445 Baht/room/nigh and the room areas were between 15 and 97 square meters with average area of 30 square meters.

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Published
2016-04-29
How to Cite
Likitanupak, W., & Tochaiwat, K. (2016). The Prediction Model for Average Daily Rate (ADR) For a Sample of Three-Star Hotels in Bangkok. Social Science Asia, 2(2), 55-68. Retrieved from https://socialscienceasia.nrct.go.th/index.php/SSAsia/article/view/61
Section
Research Article