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Economic research - Ekonomska istraživanja, Vol. 32 No. 1, 2019.

Original scientific paper

https://doi.org/10.1080/1331677X.2019.1642785

Profitability determinants of hotel companies in selected Mediterranean countries

Mira Dimitrić orcid id orcid.org/0000-0001-6941-5392 ; Faculty of Economics and Business, University of Rijeka, Rijeka, Croatia
Ivana Tomas Žiković orcid id orcid.org/0000-0002-9156-3479 ; Faculty of Economics and Business, University of Rijeka, Rijeka, Croatia
Andrea Arbula Blecich orcid id orcid.org/0000-0002-1379-6410 ; Faculty of Economics and Business, University of Rijeka, Rijeka, Croatia

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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.

Keywords

Hotel companies; profitability determinants; dynamic panel data

Hrčak ID:

228875

URI

https://hrcak.srce.hr/228875

Publication date:

22.1.2019.

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