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Impacts of star-rated hotel expansion on inbound tourism development: evidence from China

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  • Ruyi Shi
  • Shengbao Ji
  • Xiaozhen Wang
  • Fan Li

Abstract

This article applies heterogeneous firm trade theory, developed for the manufacturing sector, to the hotel and tourism industry to detect expansion among star-rated hotels in the context of inbound tourism development at the macro level. This article adopts both a traditional ordinary least squares (OLS) panel model and a threshold panel model using data from 31 administrative regions (provinces) in China during the 2004--2013 period. The results reveal remarkable and significant nonlinear relationships between star-rated hotel expansion and inbound tourism development, thereby offering sound evidence supporting the research hypotheses. Star-rated hotel expansion in most provinces clusters in the standardized threshold between 0.48 and 0.83, while only a few hotels have realized ‘leapfrog development’ thus far. In addition, as in the particular case of star-rated hotels, inbound tourism development should be promoted through investments in human resources rather than through the exploitation of natural tourism resource endowments. The implications of our results are that rational development plans can be made according to different expansion levels of star-rated hotels in corresponding regions, when both hotel labour productivity and macro tourism environment are considered.

Suggested Citation

  • Ruyi Shi & Shengbao Ji & Xiaozhen Wang & Fan Li, 2016. "Impacts of star-rated hotel expansion on inbound tourism development: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 48(32), pages 3033-3048, July.
    • Handle: RePEc:taf:applec:v:48:y:2016:i:32:p:3033-3048
    DOI: 10.1080/00036846.2015.1133900
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    References listed on IDEAS

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    1. Zeynep Ton, 2008. "The Effect of Labor on Profitability: The Role of Quality," Harvard Business School Working Papers 09-040, Harvard Business School, revised Jul 2009.
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    Cited by:

    1. Li, Guangqin & Pu, Kangyun & Long, Minghui, 2023. "High-speed rail connectivity, space-time distance compression, and trans-regional tourism flows: Evidence from China's inbound tourism," Journal of Transport Geography, Elsevier, vol. 109(C).
    2. Jun Zhang & Li Cheng, 2019. "Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China," Sustainability, MDPI, vol. 11(2), pages 1-22, January.

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