Factors affecting hospitality industry's economic performance

Abstract

Tourism yield is currently one of the most contemporary fields of tourism research. This paper is a contribution to the ongoing Tourism Yield Norway project conducted at the Norwegian School of Hotel Management. Data has been obtained of financial performances of businesses within the hospitality and tourism industry in one of Norway’s most tourism-wise developed region – Rogaland. This paper set out to test part of one of three dimensions (economic, environmental and socio-cultural) of tourism yield on the corporate level – the financial yield. Basic statistical analysis of the companies’ economic performances – both according to region (26 municipalities) and according to their type of business (including hotels, restaurants, retail, tour operator, entertainment activities, sport related tourism, etc.) – was performed with the outcome of a solid set of statistics indicating the financial yield of tourism in the Rogaland region and its current trends creating a foundation for future forecasting of financial performance of the sector. The findings indicate that there is no correlation between average pay and the location (urban or rural) in the region. The location is also not significant in determining a company’s financial performance. Furthermore, the study suggests that increases in average net income are positively correlated with increases of both number of employees and increases in average pay. Finally, the company’s size (based on number of employees) and the type of business are both significant in determining a company’s financial performance (net income).