Towards a Theory of Intraurban Hotel Location

In his seminal paper on the urban land market, Alonso notes that when a purchaser acquires land, he acquires two goods (land and location) in one transaction, and a single payment is made for the combination. Thus it is possible to trade off a quantity of land against location, the principle underlying Alonso's bid-rent analysis. It is argued that the Alonso model of bid-rent analysis is still applicable to those types of economic activity which display a hierarchy of use in terms of distance from the city centre. The concern here is with hotel location, and we develop a model of the Alonso type which casts light upon the intraurban location decisions of hotels.