Impacts of star-rated hotel expansion on inbound tourism development: evidence from China

Abstract

This article applies heterogeneous firm trade theory, developed for the manufacturing sector, to the hotel and tourism industry to detect expansion among star-rated hotels in the context of inbound tourism development at the macro level. This article adopts both a traditional ordinary least squares (OLS) panel model and a threshold panel model using data from 31 administrative regions (provinces) in China during the 2004-2013 period. The results reveal remarkable and significant nonlinear relationships between star-rated hotel expansion and inbound tourism development, thereby offering sound evidence supporting the research hypotheses. Star-rated hotel expansion in most provinces clusters in the standardized threshold between 0.48 and 0.83, while only a few hotels have realized 'leapfrog development' thus far. In addition, as in the particular case of star-rated hotels, inbound tourism development should be promoted through investments in human resources rather than through the exploitation of natural tourism resource endowments. The implications of our results are that rational development plans can be made according to different expansion levels of star-rated hotels in corresponding regions, when both hotel labour productivity and macro tourism environment are considered.

Threshold Effect of Tourism Development on Economic Growth Following a Disaster Shock: Evidence from the Wenchuan Earthquake, P.R. China

“…For the other explanatory variables, in line with Che [103], Foster [104], Pratt [105] and Shi et al [106], the variables of HD, INV, and IS are estimated to be positive and significant at the 1% statistical level, indicating that transportation accessibility, capital investment and industrial structure can significantly stimulate economic growth. The dummy variable Y2008 for the Wenchuan earthquake has a significantly negative impact on economic growth at the 1% statistical level.…”

“…The reason for this may be attributed to the symptom of 'Dutch disease'. On the one hand, tourism may lead to a reallocation of productive resources and labor from other traditionally productive sectors (e.g., agriculture, manufacturing, forestry) to the tourism-oriented sectors, weakening the competitiveness of traditional sectors [72,106]. This will cause a deindustrialization process and hamper long-term economic growth.…”

Estimating the Provincial Economic Impacts of Hotels, Scenic Areas and Transportation Infrastructure in China: The Mediating Role of Tourism Development Quality

“…China has witnessed rapid inbound and outbound tourism development and star-rated hotel expansion since its accession to the World Trade Organization (WTO) (Shi et al, 2016). In recent years, hospitality industry, which is one of the tourism's three pillars, has developed rapidly (Song, 2016), especially high star-level hotels represented by four and five-star hotels (Zheet al, 2019).…”

“…2 Literature review and hypothesis development 2.1 Hotels and tourism, regional economy Hospitality industry is one of the forces that cannot be ignored in economic construction (Song, 2016).According to Frank et al (1994), the hotel industry can create jobs, output and promote regional economic development. Shi et al (2016) discovered that the expansion of high star-rated hotels in China significantly affected the development of inbound tourism. As illustrated by Jeffrey and Hubbard (1988), the development of inbound tourism and hotel industry increased regional economic benefits.…”

Analysis of Potential of Inbound Tourism for Major Sources of Tourists and Influencing Factors in China

“…There is no doubt that culture exerts a significant influence on the development of China's inbound tourism. It advances the development of traditional Chinese culture on the one side, and builds a platform for the world to know about China on the other side [9,12,15]. For instance, China has set Confucius Institutes over the globe.…”