Pricing attributes of day cruises in Nha Trang bay using hedonic pricing

Abstract

This study employs a hedonic price model to investigate the relationship between package prices of one-day island tours and the different attributes/characteristics associated with them. 127 observations of prices were obtained from 24 tour operators running in Nha Trang City. Using OLS regression method, the results show that the differences in prices among tours to a large degree can be explained by the differences in five various characteristics. Specifically, quality of lunch, the availability of VIP tour, the presence of seafood serving and diving activity have positive and significant effects on prices while the number of destinations has a negative significant effect on prices. With regard to the empirical estimates of attributes’ relative importance, quality of lunch is at the head of the ranking list. The results of this study are expected to assist business managers as well as policy makers in drawing strategies for the improvement and investment. Key words: hedonic price, island tours, attributes, price variation, Nha Trang bay MPA.