Identifying factors influencing on the profitability of tourist enterprises: Evidence from Vietnam

Abstract

The profitability of tourism industry is affected by several factors due to the specificity of tourism business activities such as the season, resources, geographic position, state and local policy, etc. Therefore, determining the groups of factors that affect the profitability and profitability ratios in tourism business activities helps to give synchronous solutions to improve the efficiency of tourism business. This study is based on a survey on the factors affecting the profitability through the questionnaires and interviews of 115 tourist enterprises in BinhDinh, Vietnam. The study conducts Cronbach's Alpha and EFA analysis to determine groups of influencing factors and building regression functions of factors affecting the profitability ratios in tourist enterprises in BinhDinh province, Vietnam. Based on the EFA analysis results, the study has found two main types of factors affecting the profitability of enterprises; namely within and outside the firms. The group of factors within the enterprise includes 3 small groups; namely financial capacity; Enterprise human resources and Enterprise leadership. The external factors include 4 small groups including tourism business market; travel space and support services; political institutions; infrastructure and tourism security. The effects of these factors on financial figures are also represented in regression form.