COVID-19 pandemic and hotel property performance

Abstract

Purpose

The purpose of this study is to test the local impact of COVID-19 pandemic on hotel performance at the individual property level, and further examine the roles of hotel attributes and business mix in potentially moderating or intensifying the impact of a crisis.

Design/methodology/approach

Using a sample of 5,090 hotel properties in Texas, USA from January 2020 to December 2021, this study estimates a monthly hotel performance model to evaluate how the pandemic affected hotels’ operational performance based on revenue per available room.

Findings

Results show that a 10% increase in the monthly number of confirmed COVID-19 cases led to a 0.522% decrease in hotel performance. Also, a series of moderators were identified within the pandemic–performance relationship: the negative impact of the pandemic was more severe among higher-end hotels and newer hotels; urbanization and localization diseconomies prevailed during the pandemic; and there was a smaller negative effect of COVID-19 on high rated hotels in the category of economy hotels.

Originality/value

The moderators highlighted in this paper shed light on the heterogeneity of COVID-19’s effects on hotel operations. Findings enrich the hospitality literature by considering business resilience in relation to the pandemic.

Citation

Yang, Y., Li, H. and Roehl, W.S. (2024), "COVID-19 pandemic and hotel property performance", International Journal of Contemporary Hospitality Management, Vol. 36 No. 1, pp. 71-90. https://doi.org/10.1108/IJCHM-09-2022-1084