Determinants of Hotel Business Success in Rural Areas of the Western Balkan Countries

Miroslav Pimić, Zoran D. Simonović, Nikola Radivojević (), Iuliana Nicolae and Nikola V. Ćurčić ()
Additional contact information
Miroslav Pimić: Faculty of Economics and Engineering Management, University Business Academy, 21107 Novi Sad, Serbia
Zoran D. Simonović: Institute for Agricultural Economics, 11080 Belgrade, Serbia
Nikola Radivojević: Academy at Applied Studies, “Šumadija”, 34000 Kragujevac, Serbia
Iuliana Nicolae: Doctoral School Economics II, Bucharest University of Economic Studies, Mihail Moxa Street No. 5–7, 010961 Bucharest, Romania
Nikola V. Ćurčić: “Tamiš” Research and Development Institute, 26101 Pančevo, Serbia

Sustainability, 2024, vol. 16, issue 17, 1-17

Abstract: This paper examines the impact of ten microeconomic factors on hotel business success. This research encompassed a sample of 115 small, family-operated hotels situated in rural regions of the Western Balkan countries (WBC). This research was based on the assumption that factors such as the size of the hotel, age, solvency, liquidity, labour productivity, capital productivity, CSR, and reduction of CO 2 emissions exhibit a positive influence on business success, whereas leverage, indebtedness, and energy consumption have a negative effect on the business success of hotels. The findings revealed that business success from the previous period, size, liquidity, and CSR exhibit a positive influence on business success, whereas leverage, capital productivity, and indebtedness demonstrate a negative effect. Conversely, the age of the hotel and labour productivity were not found to significantly influence business success, as did energy consumption. In the context of sustainable development, a positive CSR impact means that tourists value this behaviour of the hotel, while a lack of a statistically significant impact of energy consumption implies either that hotels do not implement efficient measures of energy efficiency or that energy efficiency may not be a crucial factor in attracting guests or influencing their loyalty. The findings also show that labour productivity expressed conventionally does not have a statistically significant impact on hotel business success. However, when expressed in a way that respects the concept of sustainable development and CSR, workforce productivity is a significant factor in hotel business success. Due to the problem of multicollinearity, the influence of CO 2 emissions was not examined. The findings suggest the following two groups of key measures: 1. Policymakers must work on ensuring more favourable conditions under which hotels can borrow, as well as on ensuring adequate infrastructure; 2. They must work on improving the strategy for maintaining liquidity to avoid the high costs of short-term loans and increasing size in order to further utilise economies of scale. These two microeconomic factors have the greatest impact on the business success of hotels.

Keywords: microeconomic factors; hotel industry; Western Balkan countries; business success; rural area (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:16:y:2024:i:17:p:7704-:d:1471603

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