IDEAS home Printed from https://ideas.repec.org/a/sae/toueco/v18y2012i5p941-952.html
   My bibliography  Save this article

Business Diversification in the Hotel Industry: A Comparative Advantage Analysis

Author

Listed:
  • Chia-Yu Yeh

    (Department of Economics, National Chi Nan University, 1 University Road, Puli, Nantou 54561, Taiwan)

  • Chiang-Ming Chen

    (Department of Economics, National Chi Nan University, 1 University Road, Puli, Nantou 54561, Taiwan)

  • Jin-Li Hu

    (Institute of Business and Management, National Chiao Tung University, Taiwan)

Abstract

The accepted norm of hotels generating the highest portion of revenue from their room sales does not apply in the case of Taiwan. International tourist hotels in Taiwan tend to diversify their business by expanding their food and beverage (F&B) services. According to international tourist hotels' financial statements for 1996–2008 (published by the Taiwan Tourism Bureau), almost 60% generate higher revenue from their F&B services. Drawing on the concept of comparative advantage, this study assumes that a hotel's comparative advantage depends on evaluating the profitability between the F&B departments and the lodging departments. The authors propose a simultaneous equation model with qualitative and limited dependent variables, drawing on the interactions between hotel profitability and revenue structure. The empirical results show that hotels in which F&B services contribute the majority of the revenue have a profitability advantage.

Suggested Citation

  • Chia-Yu Yeh & Chiang-Ming Chen & Jin-Li Hu, 2012. "Business Diversification in the Hotel Industry: A Comparative Advantage Analysis," Tourism Economics, , vol. 18(5), pages 941-952, October.
    • Handle: RePEc:sae:toueco:v:18:y:2012:i:5:p:941-952
    DOI: 10.5367/te.2012.0152
    as

    Download full text from publisher

    File URL: https://journals.sagepub.com/doi/10.5367/te.2012.0152
    Download Restriction: no
    File URL: https://libkey.io/10.5367/te.2012.0152?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Lee, Lung-Fei, 1978. "Unionism and Wage Rates: A Simultaneous Equations Model with Qualitative and Limited Dependent Variables," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 19(2), pages 415-433, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Yang, Yang & Cao, Yang & Yang, Li-Ting (Grace), 2017. "Product diversification and property performance in the urban lodging market: The relationship and its moderators," Tourism Management, Elsevier, vol. 59(C), pages 363-375.
    2. Chen Hao & Xuegang Feng & Dandan Wu & Xiaodong Guo, 2024. "Board interlocks and corporate risk-taking: An empirical analysis of listed companies from tourism and related industries in China," Tourism Economics, , vol. 30(1), pages 174-211, February.
    3. Ming-Hsiang Chen & Kun Lun Wu & Hung-Jen Su, 2014. "Research Note: A Study of the Business Cycle of the Hotel Industry in Taiwan," Tourism Economics, , vol. 20(3), pages 655-664, June.
    4. Yi-Lung Lee & Shew-Huei Kuo & Mei-Yi Jiang & Yang Li, 2019. "Evaluating the Performances of Taiwan’s International Tourist Hotels: Applying the Directional Distance Function and Meta-Frontier Approach," Sustainability, MDPI, vol. 11(20), pages 1-11, October.
    5. Xiaoying Guo & Wei Wei & Yang Li & Lei-Ya Wang, 2019. "A Study of Different Types of Air Pollutants on the Efficiency of China’s Hotel Industry," IJERPH, MDPI, vol. 16(22), pages 1-13, November.
    6. Yu-Chen Lin & Chiang-Ming Chen, 2014. "Research Note: Service Quality and Market Structure in the International Tourist Hotel Industry," Tourism Economics, , vol. 20(3), pages 647-654, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. McCausland, David & Pouliakas, Konstantinos & Theodossiou, Ioannis, 2005. "Some are Punished and Some are Rewarded: A Study of the Impact of Performance Pay on Job Satisfaction," MPRA Paper 14243, University Library of Munich, Germany.
    2. repec:mse:cesdoc:09059r is not listed on IDEAS
    3. Trottmann, Maria & Zweifel, Peter & Beck, Konstantin, 2012. "Supply-side and demand-side cost sharing in deregulated social health insurance: Which is more effective?," Journal of Health Economics, Elsevier, vol. 31(1), pages 231-242.
    4. Mundaca, Gabriela, 2015. "Multi-product firms, exports and exchange rate policies. Evidence from an emerging economy," MPRA Paper 65751, University Library of Munich, Germany.
    5. Yuen Leng Chow & Isa E. Hafalir & Abdullah Yavas, 2015. "Auction versus Negotiated Sale: Evidence from Real Estate Sales," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 43(2), pages 432-470, June.
    6. Edoardo Di Porto & Vincent Merlin & Sonia Paty, 2013. "Cooperation among local governments to deliver public services : a "structural" bivariate response model with fixed effects and endogenous covariate," Working Papers halshs-00787600, HAL.
    7. SHIMIZUTANI Satoshi & SUZUKI Wataru & NOGUCHI Haruko, 2003. "Nonprofit Wage Premiums in Japan's Child Care Market:Evidence from Employer-Employee Matched Data," ESRI Discussion paper series 034, Economic and Social Research Institute (ESRI).
    8. Wollni, Meike & Brümmer, Bernhard, 2012. "Productive efficiency of specialty and conventional coffee farmers in Costa Rica: Accounting for technological heterogeneity and self-selection," Food Policy, Elsevier, vol. 37(1), pages 67-76.
    9. Eric Rasmusen, 1995. "Observed Choice, Estimation, and Optimism About Policy Changes," Econometrics 9506004, University Library of Munich, Germany, revised 16 Jun 1995.
    10. E. Michael Foster & Leonard Bickman, 1996. "An Evaluator's Guide To Detecting Attrition Problems," Evaluation Review, , vol. 20(6), pages 695-723, December.
    11. Helena Skyt Nielsen & Marianne Simonsen & Mette Verner, 2004. "Does the Gap in Family‐friendly Policies Drive the Family Gap?," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(4), pages 721-744, December.
    12. Nicole Black & Johannes S. Kunz, 2019. "The Intergenerational Effects of Language Proficiency on Child Health Outcomes," Monash Economics Working Papers 05-19, Monash University, Department of Economics.
    13. C. Mulvey, 1983. "Unions and Relative Pay in Australia," Economics Discussion / Working Papers 83-16, The University of Western Australia, Department of Economics.
    14. Malmendier, Ulrike M. & Botsch, Matthew J., 2020. "The Long Shadows of the Great Inflation: Evidence from Residential Mortgages," CEPR Discussion Papers 14934, C.E.P.R. Discussion Papers.
    15. Song, Chunxiao & Liu, Ruifeng & Oxley, Oxley & Ma, Hengyun, 2018. "The adoption and impact of engineering-type measures to address climate change: evidence from the major grain-producing areas in China," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 62(4), October.
    16. Magnani, Elisabetta & Prentice, David, 2003. "Did globalization reduce unionization? Evidence from US manufacturing," Labour Economics, Elsevier, vol. 10(6), pages 705-726, December.
    17. Holzer, Harry J, 1987. "Informal Job Search and Black Youth Unemployment," American Economic Review, American Economic Association, vol. 77(3), pages 446-452, June.
    18. Lassibille, Gerard, 2001. "Earnings distribution among Spanish engineers: research vs. non-research occupations," Research Policy, Elsevier, vol. 30(4), pages 673-680, April.
    19. Daniel B. Klaff & Ronald G. Ehrenberg, 2003. "Collective Bargaining and Staff Salaries in American Colleges and Universities," ILR Review, Cornell University, ILR School, vol. 57(1), pages 92-104, October.
    20. Massa, Massimo & Schumacher, David, 2015. "Subcontracting in International Asset Management: New Evidence on Market Integration," CEPR Discussion Papers 10465, C.E.P.R. Discussion Papers.
    21. Jacqueline Agesa & Richard Agesa, 1999. "Gender differences in the incidence of rural to urban migration: Evidence from Kenya," Journal of Development Studies, Taylor & Francis Journals, vol. 35(6), pages 36-58.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:sae:toueco:v:18:y:2012:i:5:p:941-952. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: SAGE Publications (email available below). General contact details of provider: .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.