Determinants of tourism hotel profitability in Tunisia

Abstract

This study uses panel regression tests to examine the impact of the economic performance on the financial one. The retained measures for the economic performance and the financial one are, respectively, the operational efficiency score estimated with data envelopment analysis and the return on assets. This investigation leads to four major conclusions. First, the test results confirm that hotel financial performance is linked to its economic performance that is evaluated by its technical efficiency. Second, hotels affiliated to an international chain, hotels operating under a franchise contract, and hotels located in coastal areas or situated in scenic areas present a better financial performance than others. Third, the managers’ high intellectual level positively affects financial performance. However, hotel size and indebtedness have negative impacts. Fourth, hotel financial performance is linked to its contextual factors such as the tourism region attractiveness. Finally, this study ensures the significant impact of national and international crises, such as terrorist attacks on hotel financial performance.