Categorizing the Spanish accommodation sector: Does firm size influence economic profitability?

Hernández-Lara, Ana B.; Campa-Planas, Fernando; Sánchez-Rebull, M. Victoria

Abstract:

This work aims at clustering Spanish accommodation firms into representative groups and at determining the firm size indicators that characterize each group. By doing this, we strive to explain the different groups’ profitability by their firm size indicators, and conclude how such firm size indicators are useful to explain firms’ economic sustainability. We apply clustering and logistic regression analyses using year 2008 data from 197 firms to group Spanish accommodation firms in terms of their economic profitability and to determine the firm size indicators that characterize each group. These analyses show three groups of accommodation firms in Spain. Companies in the first group have a positive relationship of profits with operating revenues and assets, but a negative relationship of profits with the number of employees. Companies in the second group have profits positively influenced by the number of employees and negatively affected by assets. Finally, companies in the third group show a negative influence on profits exerted by operating revenues but are positively affected by the number of employees and assets. These findings can serve as a guide to know companies’ categories in the accommodation sector in terms of their economic profitability. This work also provides managers with useful information to improve the economic sustainability of these companies. This information could support strategic decisions about the competitive position of their firms and the volume of competitors with a similar economic profile.

Year:

2012

Type of Publication:

Article

Keywords:

economic profitability, firm size, accommodation sector, Spain

Journal:

Cornell Hospitality Quarterly

Volume:

53

Number:

3

Pages:

257-264

ISSN:

1938-9663

DOI:

https://doi.org/10.1177/1938965512445459