Revenue determinants in alternative tourism app

ABSTRACT

A firm would like to know which factors are the most significant for its revenue growth and this can be a very complex problem to solve since revenue determinants can be identified by literature to be a plethora of variables. The paper provides the methodology for pinpointing the most important revenue determinants for tourism accommodation establishments. Specifically, it aims to provide insight into revenue determinants of hotels and tourist accommodation establishments specializing in alternative tourism in a land-lock region of Northwestern Greece using the LASSO method on questionnaire data. LASSO presents many advantages for estimating tourism models with many possible determinants with a data-driven procedure for the selection of variables. Results suggest that tourists visiting the region, have strong preferences for traditional hostels of very high quality with investments in accessible tourism. Also, important determinants of revenue growth are the existence of a restaurant, playground, fitness centre, souvenir shop, the number of employees, and the human capital of the establishments. The method can be used as a yardstick in studies for other alternative tourism regions, for exhibiting the factors determining revenues.

KEYWORDS:

• Alternative tourism
• land-locked regions
• LASSO
• revenue determinants

JEL CLASSIFICATION:

• L83
• Z32
• Z38

Disclosure statement

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

Notes

1 The index was originally proposed by Harbison and Myers (1964) and it is constructed by the years of schooling weighted by the level of education.

2 For robustness, the Elastic Net logit method was also used, with similar results.

Additional information

Funding

This work was supported by European Regional Development Fund: [grant no MIS 5047196].