Common Global and Local Drivers of RevPAR in Asian Cities
By Daniel Quan, Robert C. Baker Professor in Real Estate
A study of global and local factors that drive changes in hotels' revenue per available room (RevPAR) in eight major Asian cities found that the revenues for the hotels in these cities are strongly subject to global forces. The study, "Common Global and Local Drivers of RevPAR in Asian Cities," by Crocker H. Liu, Pamela C. Moulton, and Daniel C. Quan, is available at no charge from the Cornell Center for Hospitality Research. Liu, Moulton, and Quan are all faculty members at the Cornell School of Hotel Administration.
One factor, the number of tourist arrivals, is always positively associated with RevPAR changes in the eight cities. Other factors have various levels of influence on revenues. In addition to consumer confidence, two other factors that drive RevPAR in most of the eight cities are inflation and Chinese real estate development (as a proxy for China's GDP). At one extreme, global factors explain over 90 percent of the changes in RevPAR in Seoul. At the other extreme, local factors explain 66 percent of the changes in RevPAR in Bangkok. Moulton and her coauthors suggest that these findings give hoteliers a window into the factors that drive their properties' revenues and allow investors a mechanism to make a more accurate risk assessment.
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The purpose of the Center for Hospitality Research is to enable and conduct research of significance to the global hospitality and related service industries. CHR also works to improve the connections between academe and industry, continuing the School of Hotel Administration's long-standing tradition of service to the hospitality industry. Founded in 1992, CHR remains the industry's foremost creator and distributor of timely research, all of which is posted at no charge for all to use. In addition to its industry advisory board, CHR convenes several industry roundtables each year for the purpose of identifying new issues affecting the hospitality industry.
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