Connection between hotel location and profitability drivers: an analysis of location-specific effects

Rubén Lado-Sestayo, Milagros Vivel-Búa and Luis Otero-González

Current Issues in Tourism, 2020, vol. 23, issue 4, 452-469

Abstract: This paper analyzes the impact of the spatial positioning of a hotel on profitability. The determinants that increase hotel profitability could differ from one location to another. No previous studies have delved into the analysis of the spatial stability hypothesis of hotel profitability, so this is the main contribution of this paper. The theoretical framework is based upon the models of geographical positioning, agglomeration economies, and competitive environment. The econometric analysis was performed on a large sample of Spanish hotels, including information about hotel characteristics and tourist destination aspects from 2005 to 2011, which encompass the high growth, crisis, and recovery subperiods. The results show that empirical testing of performance determinants cannot neglect the spatial location of the hotel because important differences among locations were found.

Date: 2020
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DOI: 10.1080/13683500.2018.1538203

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