Hedonic Pricing and Willingness to Pay for Bed and Breakfast Amenities in Southeast Wisconsin

While the hedonic price model has been used to evaluate willingness to pay in a variety of markets, its use in the tourism industry is limited. This research note highlights the usefulness of the hedonic price technique in this industry by evaluating willingness to pay for specific characteristics of bed and breakfast accommodations. Heterogeneity in price and amenities offered by bed and breakfast accommodations enables us to generate estimates of willingness to pay for specific characteristics. Using data on price and amenities collected from bed and breakfast accommodations in Southeast Wisconsin, the findings show a willingness to pay for specific characteristics such as a hot tub, a private bath, and a larger room. However, fireplaces, themes, scenic views, and room service were not statistically significant determinants of price. Location characteristics, day of week, and time of year are also found to be important.