The role of remoteness in the rental value of rural tourism lodging
units: A comparison among an Eastern and Western destination
Hernández, Juan M.1 (jhernandez@dmc.ulpgc.es ) Suárez‐Vega, Rafael1 (rsuarez@dmc.ulpgc.es) Santana‐Jiménez, Yolanda1 (ysantana@dmc.ulpgc.es) Sun, Ya‐Yen2 (yysun@nuk.edu.tw ) Huang, Yu‐Ling2 (ylhuang.syvi@gmail.com ) 1Department of Quantitative Methods in Economy, University of Las Palmas de Gran Canaria, Spain 2Department of Kinesiology, Health and Leisure Studies (DKHL), National University of Kaohsiung, Taiwan Abstract. The pricing strategy of rural houses is influenced by a combination of diverse factors. The common characteristics include the availability of amenities, scale of the facility, the view outside the room, customer rating, and quality of the open space (Cox & Vieth, 2003; Fleischer & Tchetchik, 2005; Hamilton, 2007; Mangion, Durbarry, & Sinclair, 2005; Thrane, 2007). The spatial attribute of “remoteness” of the rural house surrounding environment however is blended with other characteristics and its importance is not well defined in the literature. Therefore, in this study, the main purpose is to quantify the influences of “remoteness” on the rural house rental price using a hedonic price model. In addition, two country data is compared to demonstrate the applicability of remoteness in rental price under Western and Eastern social cultures. The operational definition of “remoteness” is defined using following variables: 1. distance/travel time to major transportation facilities, health center, and beach; 2. population within a predefined distance/travel time; 3. an indicator of urban versus rural location. All factors represent the proximity to the people, service and facilities at an expense of solitude. The study subject includes rural houses in La Palma, Spain and PengHu islands, Taiwan, respectively. These two areas share similarities in terms of its isolated small island status and relying on sea and air transportation for access. La Palma belongs to the archipelago of Canary Islands, which is a traditional mass tourism destination. However, this island has maintained during last decades a moderate tourism growth mainly based on rural tourism. La Palma recieves a large amount of visitors from European countries, while PengHu islands serve mainly domestic tourists. Nevertheless, both regions exhibit an economic dependence on the tourism development and a strong supply of rural houses or Bed and Breakfast (B&Bs) (INE, 2010; Taiwan Tourism Bureau, 2010).
The difference of these two is the expected attitude of “remoteness” in tourist preference for choosing their preferred rural houses, which may indirectly influence the pricing of the business entities. It is a general pattern that the Asian consumers, especially in the highly populated Taiwan, values greatly the convenience of assessing to amenities, transportation, and services in choosing real estate (Choy, Mak, & Ho, 2007; Lin & Hwang, 2004). We hypothesize that this perspective would also influence their accommodation choice in travel as they are expected to demonstrate a rural house preference of choosing those that are located near the urban area or transportation facilities. In other words, the attribute of location remoteness would negatively influence the pricing strategy of B&Bs in Taiwan. However, remoteness and solitude are expected to be an added advantage on the rental price in the Western tourism destination like La Palma. In fact, previous studies have revealed that isolation is positively valued by the fishing tourism in lakes of Canada and also in the island of Gran Canaria, Spain (Hunt et al. 2005; Santana‐Jiménez et al. 2009). The quantitative analysis is replicated for the two destinations above. The results reveal that some environmental and spatial characteristics are influential on the rental price of the rural house. The comparison between both destinations reveals similarities and differences among the Eastern and Western rural tourist market. Moreover, some policy recomendations are also extracted from the empirical findings, which can help local agents to better design the future of the industry. Reference Choy, L., Mak, S., & Ho, W. (2007). Modeling Hong Kong real estate prices. Journal of Housing and the Built Environment, 22(4), 359‐368. Cox, L. J., & Vieth, G. R. (2003). Hotel investment in open area. Annals of Tourism Research, 30(2), 342‐352. Fleischer, A., & Tchetchik, A. (2005). Does rural tourism benefit from agriculture? Tourism Management, 26(4), 493‐501. Hamilton, J. M. (2007). Coastal landscape and the hedonic price of accommodation. Ecological Economics, 62, 594‐602. Hunt, L.M., Boxall, P., Englin. J. and Haider, W. (2005). Remote tourism and forest management: a spatial hedonic analysis. Ecological Economics 53, 101‐113. INE (2010). Encuesta de ocupación en alojamientos de turismo rural. Government of Spain. http://www.ine.es/inebmenu/mnu_hosteleria.htm#9 Lin, J.‐J., & Hwang, C.‐H. (2004). Analysis of property prices before and after the opening of the Taipei subway system. The Annals of Regional Science, 38(4), 687‐704. Mangion, M.‐L., Durbarry, R., & Sinclair, M. T. (2005). Tourism competitiveness: price and quality. Tourism Economics, 11(1), 45‐68. Santana‐Jiménez, Y., Suárez‐Vega, R. and Hernández, J.M. (2009) Valuation of the spatial characteristics of rural tourism in Gran Canaria, Spain. Presented in International Association of Tourism Economics Conference'09. Chiang‐Mai, Thailand. Taiwan Tourism Bureau. (2010). Monthly report on home stay facilities operations in Taiwan. Taipei, Taiwan: Department of Transportation.
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