Profitability in Egyptian hotels: business model and sustainability impact

Abstract

The goals of this research are: first, to identify factors impacting hotel profitability; second, to explore the profitability ratios most commonly used by Egyptian hotel managers; third, to examine whether the hotel profitability is considered an issue of control or not. Questionnaires were collected from a convenience sample of hotels at different locations in Egypt. Two-stage analysis was performed, involving the hotel profitability estimation in the first stage using a sophisticated frontier analysis technique (LIMDEP), and the determination of hotel profitability determinants during the second stage using regression analysis. Results showed that hotels' ability to succeed is not only determined by their business model attributes of size or location, but by their type, brand, and some controlled factors such as sustainability practices. The importance/performance analysis (IPA) showed that occupancy rate as a profitability indicator was situated in the second IPA quadrant, meaning)