Measuring the Effect of Infectious Disease-Induced Uncertainty on Hotel Room Demand: A Longitudinal Analysis of U.S. Hotel Industry

Keywords

Infectious disease uncertainty; EMV; operational performance demand

Abstract

This study investigates the effect of infectious disease uncertainty on hotel room demand covering the period 2005–2020. Also, the extent to which the effect of uncertainty borne by infectious diseases varies across different hotels segments are examined. Furthermore, the latest infectious disease pandemic, COVID-19, was used to test the joint impact of state-imposed restrictions and infectious disease uncertainty on hotel room demand. Using Infectious Disease Equity Market Volatility (EMV-ID) tracker as a proxy for uncertainty, the findings showed that infectious disease uncertainty leads to a decline in state-level hotel occupancy both in the short- and long-run. These results rule out the potential confounding effect of state-level restrictions by demonstrating that EMV-ID accounts for additional variance in hotel demand. Findings also indicate that this negative effect is not uniform across hotel segments; the greater levels of state-imposed restrictions lead to decreases in hotel room demand. Practical and research implications are discussed.

Publication Date

5-2022

Original Citation

Ozdemir, O., Kizildag, M., Dogru, T., & Madanoglu, M. (2022). Measuring the effect of infectious disease-induced uncertainty on hotel room demand: A longitudinal analysis of U.S. hotel industry. International Journal of Hospitality Management, 103, N.PAG. https://doi.org/10.1016/j.ijhm.2022.103189

Document Type

Paper

Language

English

Source Title

International Journal of Hospitality Management

Volume

103

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

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