The determinants of hotel room rates: Another visit with Singapore's data

In this research note, volatility clustering modeling framework is used to examine the determinants of hotel room rates in Singapore. Using monthly data from January 1985 to June 2009, GARCH-M(1, 1) is identified as the appropriate model used to capture volatility clustering. The results suggest that total inbound tourists and economic performance have positive effects on hotel room rates. The main findings are (a) the occurrences of terrorist activities in the neighboring countries have negative impacts and (b) the volatility of hotel room rates has a positive effect, on hotel room rates.