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Higher tourism specialization, better hotel industry efficiency?

Dapeng Zhang1, Jinghua Tu1, Lingxu Zhou1

  • 1School of Business Administration, Zhongnan University of Economics and Law, 182# Nanhu Avenue, Wuhan 430073, PR China.

International Journal of Hospitality Management
|April 15, 2020
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Summary

Tourism specialization and market competition synergistically impact hotel efficiency in China. High tourism specialization doesn't guarantee hotel efficiency but intensifies competition's negative effects.

Keywords:
ChinaEfficiencyHotel industryMarket competitionStochastic frontier analysisTourism specialization

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Area of Science:

  • Hotel Management
  • Tourism Economics
  • Industrial Organization

Background:

  • The hotel industry's efficiency is crucial for tourism development.
  • Understanding the interplay between market structure and operational efficiency is vital.
  • China's hotel sector presents a unique context for examining these dynamics.

Purpose of the Study:

  • To analyze the effects of tourism specialization and market competition on hotel industry efficiency in China.
  • To investigate the synergistic relationship between these factors.
  • To provide policy and managerial insights for the Chinese hotel sector.

Main Methods:

  • Stochastic Frontier Analysis (SFA) was utilized.
  • Provincial-level data for the Chinese hotel industry was analyzed.
  • The impact of tourism specialization and market competition was quantitatively assessed.

Main Results:

  • A synergistic effect between tourism specialization and market competition on hotel efficiency was confirmed.
  • High tourism specialization does not inherently ensure hotel efficiency.
  • Tourism specialization was found to amplify the negative impact of market competition on hotel efficiency.

Conclusions:

  • The findings highlight a complex relationship between destination specialization and hotel performance.
  • Effective management strategies are needed to mitigate negative competitive effects in specialized tourism areas.
  • Policy interventions should consider the dual influence of specialization and competition on hotel efficiency.