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Impact of location on profitability in the Spanish hotel sector

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  • Lado-Sestayo, Rubén
  • Otero-González, Luis
  • Vivel-Búa, Milagros
  • Martorell-Cunill, Onofre

Abstract

This paper analyzes the impact of market structure on hotel profitability in a sample of 8992 Spanish hotels in 2005–2011, using variables relating to the hotel and tourist destination in addition to structure–conduct–performance (SCP) and Chicago School frameworks simultaneously. The results show that profitability depends largely on the market structure and the level of demand of the tourist destination and we confirm the SCP proposals. Regarding characteristics of each hotel, there are unobservable characteristics which influence on profitability and we identify the existence of economies of scale.

Suggested Citation

  • Lado-Sestayo, Rubén & Otero-González, Luis & Vivel-Búa, Milagros & Martorell-Cunill, Onofre, 2016. "Impact of location on profitability in the Spanish hotel sector," Tourism Management, Elsevier, vol. 52(C), pages 405-415.
    • Handle: RePEc:eee:touman:v:52:y:2016:i:c:p:405-415
    DOI: 10.1016/j.tourman.2015.07.011
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    3. Prageeth Roshan Weerathunga & Chen Xiaofang & Manoj Samarathunga, 2019. "Firm-specific and Contextual Determinants of Sri Lankan Corporate Hotel Performance," International Journal of Economics and Financial Issues, Econjournals, vol. 9(3), pages 213-224.
    4. Yang, Yang & Mao, Zhenxing, 2020. "Location advantages of lodging properties: A comparison between hotels and Airbnb units in an urban environment," Annals of Tourism Research, Elsevier, vol. 81(C).
    5. Lado-Sestayo, Rubén & Fernández-Castro, Ángel Santiago, 2019. "The impact of tourist destination on hotel efficiency: A data envelopment analysis approach," European Journal of Operational Research, Elsevier, vol. 272(2), pages 674-686.
    6. P. R. Weerathunga & Cheng Xiaofang & W. H. M.S. Samarathunga & P. M. B. Jayathilake, 2020. "The Relative Effect of Growth of Economy, Industry Expansion, and Firm-Specific Factors on Corporate Hotel Performance in Sri Lanka," SAGE Open, , vol. 10(2), pages 21582440209, April.
    7. Xin Long Xu & Chao Sun & Yi Li & Nidi Zhou, 2020. "The Effects of Environmental Management and Debt Financing on Sustainable Financial Growth in the Tourism Industry," SAGE Open, , vol. 10(3), pages 21582440209, August.
    8. Liu, Jingjing & Nijkamp, Peter & Lin, Derong, 2017. "Urban-rural imbalance and Tourism-Led Growth in China," Annals of Tourism Research, Elsevier, vol. 64(C), pages 24-36.
    9. Martin Falk & Robert Steiger, 2020. "Size facilitates profitable ski lift operations," Tourism Economics, , vol. 26(7), pages 1197-1211, November.
    10. Seungbee Choi & Jongho Won, 2023. "Exploring the Survival Mechanisms of Short-Term Rentals in Virginia: A Comparative Analysis of Rural versus Non-Rural Markets," Sustainability, MDPI, vol. 15(16), pages 1-17, August.
    11. Sainaghi, Ruggero & Phillips, Paul & Zavarrone, Emma, 2017. "Performance measurement in tourism firms: A content analytical meta-approach," Tourism Management, Elsevier, vol. 59(C), pages 36-56.
    12. Ante Mandić & Lidija Petrić, 2021. "The impacts of location and attributes of protected natural areas on hotel prices: implications for sustainable tourism development," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 23(1), pages 833-863, January.

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