Hospitality firms’ fee orientation and tax avoidance

Cédric Poretti and Tiphaine Jérôme

Tourism Economics, 2025, vol. 31, issue 6, 1236-1251

Abstract: This study investigates how the fee-oriented business model in the hospitality industry is associated with corporate tax avoidance. Using a sample of international hospitality firms, the results from OLS and entropy balancing estimations indicate that greater reliance on fees is associated with lower tax avoidance, reflected in higher effective tax rates. We attribute this higher tax burden to lower incentives of fee-oriented businesses to engage in tax avoidance to preserve their reputation—a strategic asset. This study provides insights into a societal benefit of the widespread adoption of the fee-oriented business model in the hospitality industry, namely increased corporate tax contributions.

Keywords: effective tax rate; fee-orientation; hospitality industry; tax avoidance (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:31:y:2025:i:6:p:1236-1251

DOI: 10.1177/13548166251347494

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