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Using Slutsky equation to find the hotel growth model in the destination life cycle: An empirical study in Myrtle Beach
International hospitality review
02/20/2023
Abstract
Purpose The purpose of this paper is to examine the hotel growth model including hotel brand, culture and life cycle phases of the Myrtle Beach, South Carolina, the fastest growing tourism destination in the United States. Design/methodology/approach Culture reflecting consuming behaviour of low-context innovators and high-context imitators is measured by the price elasticity of demand (PED). Hotel brand reflecting guests’ hotel class is measured by the income elasticity of demand. Autoregressive distributed lag has been conducted on the Smith Travel Research data in 33 years (1989–2022) to determine the relationship among hotel brand, culture and life cycles. Findings Skilled labour is the key to make hotels grow. Therefore, increase room rates when hotels possess skilled professionals and decrease room rates when hotels have no skilled professionals. During the rejuvenation in Myrtle Beach (1999–2003), hoteliers increased room rates for innovators due to skilled professionals to increase revenue. Otherwise, a decrease in room rates due to lack of skilled professionals would lead to increase revenue. Research limitations/implications (1) Although Myrtle Beach is one of the fastest growing tourism destinations in the US, it has a relatively small geographic area relative to the country. (2) Data cover over one tourist life cycle, so the time span is relatively short. Hoteliers can forecast the number of guests in different culture by changing room rates. Practical implications To optimize revenue, hoteliers can select skilled labour in professional design hotel brands which could make an increase in demand for leisure transient guests no matter what room rates increase after COVID-19 pandemic. Social implications The study has considered the applied ethical processes regarding revenue management that would maximize both revenue and customer satisfaction when it set up an increase in room rates to compensate for professional hotel room design or it decreases room rates for low-income imitators in exploration and development. Originality/value This research highlights that (1) skilled design in the luxury hotel brand is the key for the hotel growth and (2) there is a steady state of the growth model in the destination life cycle.
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Details
- Title
- Using Slutsky equation to find the hotel growth model in the destination life cycle
- Publication Details
- International hospitality review
- Resource Type
- Journal article
- Publisher
- Emerald Publishing Limited; United Kingdom
- Copyright
- © Xuan V. Tran. Published in International Hospitality Review. Published by Emerald Publishing Limited. This article is published under the Creative Commons Attribution (CC BY 4.0) licence. Anyone may reproduce, distribute, translate and create derivative works of this article (for both commercial and non-commercial purposes), subject to full attribution to the original publication and authors. The full terms of this licence may be seen at http://creativecommons.org/licences/by/4.0/legalcode
- Identifiers
- 99380185008506600
- Academic Unit
- Commerce; Lewis Bear Jr. College of Business
- Language
- English