How do hotel characteristics moderate the impact of COVID-19 on hotel performance? Evidence from Taiwan

ABSTRACT

It has been known that the COVID-19 pandemic severely damaged the hotel industry. However, it is not clear whether hotels with different characteristics are affected equally. Using data collected from the hospitality industry in Taiwan and panel data estimation methods, we examine whether different hotel characteristics moderate the impact of the COVID-19 pandemic on hotel performance. We contribute to the literature by explicitly identifying different hotel characteristics as moderating factors for the effect of COVID-19 on hotel performance. Specifically, we find that international tourist hotels with high product varieties and five-star hotels suffered a greater loss in revenue than other types of hotels while hotels located in scenic areas and international chain hotels were less affected. An important managerial implication is that among various quarantine and hygiene measures adopted by hoteliers to fight or contain the pandemic, putting emphasis on social distancing and hygiene measures is particularly important for hoteliers to regain confidence from their customers.

KEYWORDS:

• COVID-19
• room revenue
• food and beverages revenue
• hotel performance
• Taiwan

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Scenic areas are defined as opposed to metropolitan areas. According to the definition used by the government of Taiwan, a metropolitan area is an economically and socially integrated area with more than 300,000 of population. Currently, seven metropolitan areas are identified in Taiwan. Hotels located outside of the seven metropolitan areas are identified as hotels in the scenic areas in our current study.

2 We report only results from the random effects model. The fixed effects model is not applicable due to too little variations in some of the explanatory variables.

3 According to the information released by World Health Organization (WHO) on 9 July 2020, COVID-19 spreads between people mainly when an infected person is in close contact with another person.