The Impact of Exchange Rate Volatility on Hospitality Industry – A Study in Lusaka Province of Zambia

Syed Ali and Christopher Nsenje
Additional contact information
Syed Ali: Associate Professor of Economics, Mulungushi University, Kabwe, Zambia
Christopher Nsenje: General Manager, Stay Easy Hotel, Lusaka, Zambia

International Journal of Economics and Financial Research, 2017, vol. 3, issue 11, 282-288

Abstract: The purpose of this study was to find out the impact of exchange rate volatility on hospitality industry in the Lusaka Province of Zambia. This research aimed to find out the impact of exchange rate volatility on profitability, capacity utilization and the impact of GDP and inflation on profitability of hospitality industry. The study used quarterly secondary data from 2005 to 2015 with respect to three big hotels which had international branding and received over fifty percent revenue in forex. The multiple regression model was used to measure the impact of independent variables on the dependent variable. The study revealed that volatility in exchange rate had significant effect on profitability. But inflation had negative effect on profitability. The GDP growth rate had positive effect on the capacity utilization. The study concluded that the Central Bank of Zambia should take necessary steps to increase the value of domestic currency, i.e., Kwacha, and stop fluctuations in it to safeguard the profitability in the hospitality industry. The study also concluded that through appropriate monetary policy, i.e., increasing the bank rate and reserve ratio and selling the bonds in the market, the inflation could be reduced by controlling money supply.

Keywords: Exchange rate; Inflation; GDP; Profit per available room; Capacity utilization; Hospitality. (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.arpgweb.com/pdf-files/ijefr3(11)282-288.pdf (application/pdf)
https://www.arpgweb.com/?ic=journal&journal=5&month=11-2017&issue=11&volume=3 (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:arp:ijefrr:2017:p:282-288

Access Statistics for this article

International Journal of Economics and Financial Research is currently edited by Dr. Abu Hassan Bin Md Isa

More articles in International Journal of Economics and Financial Research from Academic Research Publishing Group Rahim Yar Khan 64200, Punjab, Pakistan.
Bibliographic data for series maintained by Managing Editor ().