Discounting Works in the Hotel Industry: A Structural Approach to Understanding Why

This case study provides an empirical assessment of the relationship between discounting hotel room rates and hotel financial performance. The dynamics of the lodging industry are accounted for through the adoption of an error correction model. Recent research suggests that the use of discounting room rates may not be an effective pricing strategy as it results in increased occupancy rates at decreased average daily rates, thereby reducing a common financial performance indicator – revenue per available room (revPAR). The recommendation made to hotel managers, then, is to avoid discounting and instead adopt an average rate. This study generates opposing findings and reveals that discounting may be a practical short-term pricing solution that may compensate for market disequilibria. The results suggest that using statistical residuals rather than room rate averages may more accurately forecast appropriate hotel room rates and balance supply and demand. Thus, the recommendation of adopting average room rates may provide incorrect implications for managers in the short run

Quantifying the Impacts of the Recent Economic Crisis on a Regional Tourism Industry and Economy

The purpose of this study is to explore the accuracy issue of the Input-Output model in quantifying the impacts of the 2007 economic crisis on a local tourism industry and economy. Though the model has been used in the tourism impact analysis, its estimation accuracy is rarely verified empirically. The Metro Orlando area in Florida is investigated as an empirical study, and the negative change in visitor expenditure between 2007 and 2008 is taken as the direct shock. The total impacts are assessed in terms of output and employment, and are compared with the actual data. This study finds that there are surprisingly large discrepancies among the estimated and actual results, and the Input-Output model appears to overestimate the negative impacts. By investigating the local economic activities during the study period, this study made some exploratory efforts in explaining such discrepancies. Theoretical and practical implications are then suggested

Quantifying the Impacts of the Recent Economic Crisis on a Local Tourism Industry and Economy system

The purpose of this study is to explore the accuracy issue of the Input-Output model in quantifying the impacts of the 2007 economic crisis on a local tourism industry and economy. Though the model has been extensively used in the tourism impact analysis, its estimation accuracy is rarely verified empirically. The Metro Orlando area in Florida is investigated as a case study, and the visitor expenditure change between 2007 and 2008 is taken as the direct shock. The total impacts are assessed in terms of output and employment, and are compared with the actual data. This study finds that there are surprisingly large discrepancies among the estimated and actual results, and the Input-Output model tends to overestimate the negative impacts. By investigating the local economic activities during the study period, this study made some explorative efforts in explaining such discrepancies. Theoretical and practical implications are then suggeste

Quantifying the Impacts of the Recent Economic Crisis on Regional Tourism Industry and Economy

The purpose of this study is to explore the accuracy issue of the Input-Output model in quantifying the impacts of the 2007 economic crisis on a local tourism industry and economy. Though the model has been used in the tourism impact analysis, its estimation accuracy is rarely verified empirically. The Metro Orlando area in Florida is investigated as an empirical study, and the negative change in visitor expenditure between 2007 and 2008 is taken as the direct shock. The total impacts are assessed in terms of output and employment, and are compared with the actual data. This study finds that there are surprisingly large discrepancies among the estimated and actual results, and the Input-Output model appears to overestimate the negative impacts. By investigating the local economic activities during the study period, this study made some exploratory efforts in explaining such discrepancies. Theoretical and practical implications are then suggested

Quantifying the Impacts of the 2007 Economic Crisis on a Local Tourism Industry and Regional Economy

The purpose of the study is to explore the accuracy of the Input-Output model and its derivative, the Occupation-Based model in investigating the impacts of the 2007 economic crisis on the tourism-related industries and the local economy in the Metro Orlando Area, Florida. The 2007-2008 total visitor expenditure change is taken as an initial shock from the economic crisis on the region\u27s tourism-related industries, and the total impacts are measured in terms of industry output (sales), employment and annual occupational wage. The estimation results are compared with the actual data to verify the accuracy of the modeling results. Paired-sample T tests are performed to determine whether the difference between the actual and estimated results are statistically significant or not. The findings suggest that the Input-Output model tends to overestimate the negative effects from the 2007 economic crisis in terms of output and employment, especially on the tourism-related industries. While the estimation results indicate the 2007 economic crisis greatly damaged the local tourism-related industries between 2007 and 2008, the actual data show that most of these industries experienced output and employment growth in that one year period. Moreover, the study findings also indicate that the Occupation-Based model has the tendency of overestimating the annual wage loss, especially for the occupations which take up large employment ratio in an industry. By investigating the local economic activities during the study period, this study made some explorative efforts in explaining such discrepancies. Theoretical and practical implications are then suggested

Proposing An Alternative Framework For Feasibility Studies For Large Public Tourism Investments: A Quantitative Analysis Of The

Numerous studies in the hospitality field have focused on the importance of the convention industry to the economic well being of the local tourism industry. Because of intense competition between convention centers, destinations are practicing strategies of expanding their convention facilities and related infrastructure. Unfortunately, many of these expansions appear to have been based on feasibility studies that failed to present rigorous reviews and examinations regarding alleged claims of positive impacts and over-optimistic operational pro-forma statements. The main objective of this study is to propose an alternative framework for feasibility studies, which consists of an updated, rigorous methodology to calculate a more comprehensive picture, on what convention centers can deliver on public and private investment. Data from the Orange County Convention Center (OCCC) in Orlando, Florida were used for assessing this proposed framework