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https://doi.org/10.37741/t.68.1.2

Are we explaining the movement of hotel room rates correctly?

Chew Ging Lee   ORCID icon orcid.org/0000-0003-2464-6474 ; INTI International University, Persiaran Perdana BBN, Putra Nilai, Nilai, Negeri Sembilan, Malaysia

Puni tekst: engleski, pdf (271 KB) str. 21-33 preuzimanja: 184* citiraj
APA 6th Edition
Lee, C.G. (2020). Are we explaining the movement of hotel room rates correctly?. Tourism: An International Interdisciplinary Journal, 68 (1), 21-33. https://doi.org/10.37741/t.68.1.2
MLA 8th Edition
Lee, Chew Ging. "Are we explaining the movement of hotel room rates correctly?." Tourism: An International Interdisciplinary Journal, vol. 68, br. 1, 2020, str. 21-33. https://doi.org/10.37741/t.68.1.2. Citirano 03.12.2020.
Chicago 17th Edition
Lee, Chew Ging. "Are we explaining the movement of hotel room rates correctly?." Tourism: An International Interdisciplinary Journal 68, br. 1 (2020): 21-33. https://doi.org/10.37741/t.68.1.2
Harvard
Lee, C.G. (2020). 'Are we explaining the movement of hotel room rates correctly?', Tourism: An International Interdisciplinary Journal, 68(1), str. 21-33. https://doi.org/10.37741/t.68.1.2
Vancouver
Lee CG. Are we explaining the movement of hotel room rates correctly?. Tourism: An International Interdisciplinary Journal [Internet]. 2020 [pristupljeno 03.12.2020.];68(1):21-33. https://doi.org/10.37741/t.68.1.2
IEEE
C.G. Lee, "Are we explaining the movement of hotel room rates correctly?", Tourism: An International Interdisciplinary Journal, vol.68, br. 1, str. 21-33, 2020. [Online]. https://doi.org/10.37741/t.68.1.2

Sažetak
Demand function, inverse demand function or market equilibrium condition has been used to estimate the empirical models that explain the movement of hotel room rates. However, hotels generally face excess supply of rooms. This research paper develops a simple theoretical model to link hotel room rates to excess supply of hotel rooms. The annual data of Singapore from 1991 to 2017 is used to test this framework. Due to small sample size, with only 27 observations, the bounds testing approach to cointegration is applied on the annual data of hotel industry in Singapore because the obtained estimators are super-consistent. It is found that average hotel room rate and average hotel occupancy rate are cointegrated to confirm hotel room rates and excess supply of hotel rooms are inversely correlated. In order to avoid model mis-specification, major crises are captured by dummy variables which are treated as fixed regressors in the bounds testing approach to cointegration. The empirical and theoretical frameworks used in this study suggest that when hotel occupancy rate is used as an independent variable in modelling the determination of hotel room rates, a researcher is adopting excess supply framework developed in this paper. Furthermore, this framework teaches students in tourism a simplified way to explain the movement of hotel room rates, while still reminding students about the complexity of hotel industry.

Ključne riječi
hotel room rates; disequilibrium; excess supply; crises; cointegration; Singapore

Hrčak ID: 236226

URI
https://hrcak.srce.hr/236226

Posjeta: 384 *