Using Brochure Information for the Hedonic Analysis of Holiday Packages

This paper investigates the extent to which hedonic analysis based on information drawn from the brochures of tour operators can be useful in explaining price variation between holiday packages. Using the quality characteristics of holiday packages in the Mediterranean drawn from the brochures issued by two major British tour operators, we find that hedonic analysis can give misleading results when the heterogeneity in the effects of these characteristics is ignored. We illustrate this point using two possible causes of heterogeneity in the effects of quality characteristics: when (a) quality is registered in different ways in the brochures of different tour operators and (b) the effects of quality characteristics differ between packages with a different star rating. The policy implications of our empirical findings are discussed. *We would like to thank the participants of the conference ‘Tourism Modelling and Competitiveness: Implications for Policy and Strategic Planning’, held on 31 October and 1 November 2003 in Paphos (Cyprus) for comments. We are solely responsible for errors.