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

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  • Rubén Lado-Sestayo
  • Milagros Vivel-Búa
  • Luis Otero-González

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.

Suggested Citation

  • Rubén Lado-Sestayo & Milagros Vivel-Búa & Luis Otero-González, 2020. "Connection between hotel location and profitability drivers: an analysis of location-specific effects," Current Issues in Tourism, Taylor & Francis Journals, vol. 23(4), pages 452-469, February.
  • Handle: RePEc:taf:rcitxx:v:23:y:2020:i:4:p:452-469
    DOI: 10.1080/13683500.2018.1538203
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    Cited by:

    1. Orhan, Ezgi, 2023. "Locational attributes of the lodging industry: An empirical study on urban hotels in Ankara, Turkey," Land Use Policy, Elsevier, vol. 125(C).

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