Competition, agglomeration, and performance of Beijing hotels

Eric W.K. Tsang and Paul S.L. Yip

The Service Industries Journal, 2009, vol. 29, issue 2, 155-171

Abstract: Agglomeration theory argues that locating close to competitors can be beneficial in terms of gaining from heightened demand -- more frequent consumer visits and subsequent purchases through reducing consumer search costs. This paper examines the trade-off between competition and the agglomeration effects of physical proximity in the Beijing hotel industry. It seeks to answer two questions: (1) What types of hotels contribute more to agglomeration? (2) What types of hotels benefit more from agglomeration? The results suggest that only high star-ranking joint venture hotels contribute to heightened demand while hotels of all star rankings benefit similarly from agglomeration.

Date: 2009
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:taf:servic:v:29:y:2009:i:2:p:155-171

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DOI: 10.1080/02642060802294896

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The Service Industries Journal is currently edited by Eileen Bridges, Professor Domingo Ribeiro, Ronald Goldsmith, Barry Howcroft and Youjae Yi

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