This study sought to assess customers' willingness to pay for a wide variety of characteristics and attributes of
hotels in Portugal's Algarve region. After collecting nearly all the information available on TripAdvisor for hotels
in this region, a hedonic pricing model was developed using a database of 9992 cases. The results suggest that –
after standardisation – the most important variable shaping Algarve hotel room rates is the previous day's prices.
When associated with a family-friendly hotel, star category and services have a greater value than beaches or
golf courses do. Customers also appreciate some types of hotels, such as boutique, quaint or trendy hotels, but
view others negatively, such as family-friendly or business hotels. Only the specific location of Falesia Beach
adds value, although the Algarve is a desirable destination overall. Both destination and hotel managers can use
the proposed method to analyse data for their region on customers' propensity to pay.
