Hotel and hostel location in Lisbon: Looking for Their Determinants

Abstract

To understand the potential factors contributing to the choice of location for hotels and hostels in Lisbon, Portugal, we use a logit model incorporating both lodging and location characteristics. Based on a sample of 274 hotels and hostels, we seek (i) to investigate if location strategies and decisions are influenced by lodging characteristics; and (ii) extend the set of factors that influence the spatial patterns of location of hotels and hostels. A geographical information system is then used to map hotels and investigate spatial characteristics. The results show that in general the accessibility to transport, restaurants and cultural attractions are not crucial factors in the location of hotels and hostels. With respect to higher grade hotels, the location pattern has changed with the Expo 98. The results reveal that the location pattern of higher grade hostels is now in the newly rehabilitated urban areas, which are characterized by being safer places and further away from the nightlife and near to commercial areas than from the city centre. With regard to lower grade hotels and hostels, the results do not reveal significant differences in the location pattern of both. Finally, only lower grade hotels tend to actively seek the benefits of agglomeration effects. For practitioners, the results provide useful information for selecting sites for hotels and hostels. Based on estimated results, hotel location factors are identified, providing useful suggestions for urban planning. Moreover, the model can be helpful in assisting hotel investors’, owners’ and managers’ assessments of various factors making hotel and hostel location and provide necessary supports to identify the potential location and their further development.