RevPAR determinants of Portuguese hotels

Journal article

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Publication Details

Subtitle: The global and the local factors
Author list: Pacheco L
Publisher: Institute for Tourism
Publication year: 2016
Journal: Tourism (1332-7461)
Volume number: 64
Issue number: 2
Start page: 219
End page: 230
Number of pages: 12
ISSN: 1332-7461
Languages: English-Great Britain (EN-GB)


The research about the determinants of firms' performance has been a
crucial question for managers, researchers and stockholders. The main
objective of this exploratory paper is to study the economic drivers of
revenue per available room (RevPAR) in the Portuguese hotels. This study
examines the local and global factors driving RevPAR in different hotel
segments, calculating how much of the overall changes in RevPAR are
explained by national factors and how much by broader factors. Using
seemingly unrelated regression analysis and considering monthly data
from 2011 to 2015, the results indicate that local variables are more
important than the global ones, with that difference more striking for
the 4 star hotels. In aggregate terms, local factors account for 55% of
the changes in Portuguese hotels RevPAR. The US consumer sentiment index
is never significant and the EU and Portugal consumer confidence
indexes do not seem to be important drivers of RevPAR for the different
categories of hotels. The results show that the hotel sector performance
is closely related to cyclical factors, especially to tourism growth.
Although in recent years Portugal has enjoyed a strong surge in the
number of tourists, in part motivated by external factors, the results
demonstrate the high vulnerability of the sector to those volatile and
out of our influence variables, highlighting the danger of some
reversion in the medium term.


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Last updated on 2019-10-08 at 00:15