Hospitality Operating Risk Measure And Influencing Factors

With the deepening of China’s economic reform and the continuous increasing of GDPand CPI, the investment and construction speed of hotels continues to accelerate and thenumber of hotels is increasing greatly. The overall situation of hospitality industry isthriving, while the performance of those hotels is not perfect. Now the supply of hotels isahead of the demand, and the hospitality industry may be faced with risk of overcapacity.Although the difference between supply and demand and the investing and operating risk ofhospitality industry have been realized, it has been not properly paid attention to that howabout the hospitality operating risk is, whether investors and operators can take the risk andwhat factors influence the risk. It is significant to deal with hospitality investment andoperation and scientifically appraise and forecast hospitality operating performance and riskfor both hotels and hospitality industry. To solve these problems, the dissertation analyzedthe structure and effectiveness of hospitality market based on theory of economics andfinance, closely combined with the history and stat quo, and studied the volatility inRevPAR, risk measure and influencing factors to help recognize the volatility rule andinherent risk in China’s hospitality industry at present. The research and conclusion canenrich risk management theory, reveal investment and business rule of hospitality industry,promote the healthy development of the market and provide rationale and guideline formonitoring and preventing market risk of hospitality industry.Firstly, by literature research, the related theories on risk measure and researchactuality about hospitality operating performance and risk were sorted out and analyzedtheoretically to explore the research trends in operating performance and risk issues forhospitality industry and provide theoretical background and research method. Secondly,based on theories of industrial economics, the transmitting function, influencing mechanism,relationship and existing problems of operating environment, competition structure,competition behavior and operating performance and risk of China’s hospitality industrywere analyzed and discussed qualitatively. Thirdly, based on GARCH fitting of the timeseries of RevPAR, the operation index of hospitality industry, VaR model was built tomeasure and analyze the generalized and narrow hospitality operating risk by empiricalanalysis. Finally, according to the conclusion of theoretical and literature analysis, long- and short-term influencing factors of hospitality operating risk were discussed empiricallyby cointegration test and error correction model.Through the researches above, the main conclusions are as follows：(1)The operating environment influences hospitality operating performance andrisk by transmitting function of competition structure. Macroeconomic, tourism market,political system and industrial policy environments affect the formation and changes ofmarket, property right, region and grade structures of hospitality industry, and further affectcompetition behavior, operating performance and risk of hospitality industry.(2)Hospitality operating volatility presents obvious seasonality, big variance riskand an agglomeration effect which is related to hotel grade. It is concluded thatseasonality of RevPAR’s volatility is obvious, variance risk of RevPAR’s volatility is big,and RevPAR’s volatility commonly does not obey the normal distribution, but peak heavy,tail right, and agglomeration effect by empirical study on time-series analysis of RevPAR’svolatility and GARCH model for Shanghai’s hospitality industry of overall, high-, medium-and low-grade.(3)Dynamic VaR can effectively measure hospitality operating risk. By method ofmean-variance and GARCH model, static VaR and dynamic VaR of overall, high-, medium-and low-grade hotels of Shanghai and the hospitality industry of Beijing, Hong Kong,Macao and Taipei are calculated and compared respectively. It is concluded that underdifferent significant levels, the mean values of dynamic VaR are all less than static VaR,except high-grade hotels in Shanghai. From the results of comparison of dynamic VaRmeasure, under different significant levels, VaR of Beijing’s hospitality industry is thehighest, those of Taipei and Macao are lower, which is not consonant with the conclusion ofstatic VaR measure, but more in line with actuality. And the results of failure rate test andlikelihood ratio test show that measuring hospitality operating risk by dynamic VaR iseffective.(4)Long-term influencing factors of hospitality operating risk are decided bymacro factors, and both macro and industrial factors are short-term influencingfactors of hospitality operating risk. The empirical research on long and short-terminfluencing factors of hospitality operating risk under co-integration analysis and errorcorrection model gives an conclusion that the long-term influencing factors are decided bymacroeconomics, there’s a long-term stable equilibrium relationship between GDP and CPIand RevPAR, short-term volatility in RevPAR owns significant negative feedback, andexcept for macroeconomic factors such as CPI and GDP, changes in numbers of both domestic tourists and hotels have significant effect on short-term volatility of hospitalityoperating risk.Three innovative points are reflected in this dissertation. Firstly, the improved ESPframework was proposed to analyze the transmitting and influencing function of operatingenvironment, competition structure, competition behavior and operating performance andrisk of hospitality industry. Secondly, hospitality operating risk measure model was built toempirically study hospitality operating RevPAR volatility and VaR. Finally, influencingfactor model of hospitality operating risk was built to empirically study long-andshort-term influencing factors of hospitality operating risk with co-integration analysis anderror correction model.