Influence of Tourism Seasonality and Financial Ratios on Hotels’ Exit Risk


  • Jinghua Xie HHT, UiT
  • Dengjun Zhang University of Stavanger



tourism seasonality; hotel; bankruptcy; duration analysis; Norway


A large body of research has documented the impact of tourism seasonality on hotels’ operational and financial performance, further affecting hotels’ competitive advantage and survival probabilities. Several studies have included the seasonality measures in the models to evaluate hotels’ exit risk. However, the empirical findings are ambiguous, probably because the overall seasonality and different measures were used in those studies. Against this background, this study explores the impact of tourism seasonality on hotel firms’ exit risk, by controlling for financial ratios, the main factors influencing the exit risk, and using two measures of tourism seasonality by market segment, namely, the leisure, business, and conference tourism. The primary hypotheses are: (1) The different seasonal patterns of tourism demand in the market segments mitigate the impact of the overall seasonality on hotels’ exit risk, and (2) Seasonality measures of various tourism segments affect the exit risk in different manners. The case study is the Norwegian hotel industry with 4,622 hotel-years in the period between 2008 and 2018. The empirical results suggest the failure to reject the hypotheses, regardless of the measures of tourism seasonality, indicating the robustness of our findings.