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Competition, agglomeration, and performance of Beijing hotels

Author

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  • Eric W.K. Tsang
  • Paul S.L. Yip

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.

Suggested Citation

  • Eric W.K. Tsang & Paul S.L. Yip, 2009. "Competition, agglomeration, and performance of Beijing hotels," The Service Industries Journal, Taylor & Francis Journals, vol. 29(2), pages 155-171, February.
    • Handle: RePEc:taf:servic:v:29:y:2009:i:2:p:155-171
    DOI: 10.1080/02642060802294896
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    Cited by:

    1. Ibrahim Mohammed & Basak Denizci Guillet & Rob Law, 2019. "Modeling dynamic price dispersion of hotel rooms in a spatially agglomerated tourism city for weekend and midweek stays," Tourism Economics, , vol. 25(8), pages 1245-1264, December.
    2. Rosario Silva, 2016. "Competition and demand effects of geographic distance to rivals," The Service Industries Journal, Taylor & Francis Journals, vol. 36(1-2), pages 37-57, January.
    3. Jin, Xin & Weber, Karin & Bauer, Thomas, 2012. "Impact of clusters on exhibition destination attractiveness: Evidence from Mainland China," Tourism Management, Elsevier, vol. 33(6), pages 1429-1439.
    4. Roma, Paolo & Panniello, Umberto & Lo Nigro, Giovanna, 2019. "Sharing economy and incumbents' pricing strategy: The impact of Airbnb on the hospitality industry," International Journal of Production Economics, Elsevier, vol. 214(C), pages 17-29.

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