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Profitability determinants of hotel companies in selected Mediterranean countries

Author

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  • Mira Dimitrić
  • Ivana Tomas Žiković
  • Andrea Arbula Blecich

Abstract

Tourism is one of the most important industries in the Mediterranean countries, which strongly contributes to the economic activity, capital investment and job creation. Therefore, the purpose of this paper is to examine the determinants influencing profitability of hotel companies in selected Mediterranean countries. Thereby, dynamic panel data models are estimated on an extensive dataset for the period from 2007 to 2015. The paper provides evidence on differences among internal profitability determinants of hotel companies operating in tourism competitive countries. The results indicate that the cash flow to operating revenue has a statistically significant and positive impact on profitability in all observed countries. The total asset turnover ratio is significant for all countries except Portugal, while labour productivity is significant only for Spain, which is also the country with the highest turnover per employee. The solvency ratio is positively related to profitability, except for Greece as the most indebted country. Size proved to be significant for hotels in Spain and Portugal, while age is the variable by which the countries mostly differ, as findings show a different impact of underlying variable on hotel profitability. Findings provide information to shareholders that would ensure profitability of hotel companies operating in different countries.

Suggested Citation

  • Mira Dimitrić & Ivana Tomas Žiković & Andrea Arbula Blecich, 2019. "Profitability determinants of hotel companies in selected Mediterranean countries," Economic Research-Ekonomska Istraživanja, Taylor & Francis Journals, vol. 32(1), pages 1977-1993, January.
    • Handle: RePEc:taf:reroxx:v:32:y:2019:i:1:p:1977-1993
    DOI: 10.1080/1331677X.2019.1642785
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    Cited by:

    1. Setareh Katircioglu & Salih Katircioglu, 2023. "The effects of business and finance conditions on the tourism stock markets: An empirical investigation from Turkey," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(4), pages 4500-4511, October.
    2. Goran Karanovic, 2023. "Exploring the Intrinsic Factors Influencing Return on Assets: A Case Study of the Hotel Industry in Selected EU Countries," International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology - EMaTTech), vol. 16(1), pages 54-61, October.
    3. Mercè Sala‐Ríos, 2024. "What are the determinants affecting cooperatives’ profitability? Evidence from Spain," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 95(1), pages 85-111, March.
    4. Ibrahim NIFTIYEV & Delia DAVID & Marioara IORDAN & Petru HORGA, 2024. "A Multivariate Performance Analysis Of The Plastics Manufacturers: Comparative Analysis Of European Regions," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 19(1), pages 167-188, April.
    5. Charalampos Basdekis & Apostolos Christopoulos & Evgenios Gakias & Ioannis Katsampoxakis, 2023. "The Effect of ECB Unconventional Monetary Policy on Firms’ Performance during the Global Financial Crisis," JRFM, MDPI, vol. 16(5), pages 1-20, April.

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