Influence of Uncertain Demand on Product Variety: Evidence from the International Tourist Hotel Industry in Taiwan

Chiang-Ming Chen, Chia-Yu Yeh and Jin-Li Hu ()
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Chiang-Ming Chen: Department of Economics, National Chi Nan University, Taiwan
Chia-Yu Yeh: Department of Economics, National Chi Nan University, 1 University Road, Puli, Nantou 54561, Taiwan

Tourism Economics, 2011, vol. 17, issue 6, 1275-1285

Abstract: Hotels provide many different types of rooms in terms of capacity as well as quality to diversify their products. This paper examines the relationship of uncertain demand and product variety by using monthly operation data from international tourist hotels in Taiwan during 2007–2009. First, the authors apply the two-stage least squares (2SLS) and random-coefficients models to estimate the demand function in Taiwan's international tourist hotel industry. They then examine the relationship between uncertain demand and product variety. The empirical results indicate that the market's uncertain demand significantly induces the hotels to expand their product variety.

Keywords: uncertain demand; product variety; hotel industry; random-coefficients model; Poisson model (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (6)

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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:17:y:2011:i:6:p:1275-1285

DOI: 10.5367/te.2011.0089

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