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This study analyzes the influence of budget hotel characteristics on room rates in Shanghai, China, using a hedonic price model. The data of hotels' characteristics and room rates were obtained from Qunar. The structure, location, and reputation characteristics of hotels are found to significantly influence room rates. There are significant differences in characteristics between budget hotels and high-end hotels, and the influences of these characteristics on room rates vary. The results of this study will not only be helpful for consumers' decision-making, but also contribute toward a better understanding of rational rating for the hotel managers, improving consumer satisfaction. [ABSTRACT FROM AUTHOR]