| Title: | The effects of the minimum wage on the operating performance of hotels in the U.S. | Authors: | Mun, SG Woo, L |
Issue Date: | Feb-2021 | Source: | Tourism management, Feb. 2021, v. 82, 104205, p. 1-12, https://doi.org/10.1016/j.tourman.2020.104205 | Abstract: | The economic effects of the minimum wage have been the focus of ongoing contradictory debates among policymakers and researchers. This study finds a positive effect of the minimum wage on the operating profitability of hotels in the U.S. However, the pricing practices of full-service hotels are dissimilar to those of limited-service hotels. Although the burden of the minimum wage is substantial, full-service hotels can spread the weight onto other departments, while limited-service hotels mainly rely on rooms revenue. Thus, the effects of the minimum wage on room price (average daily rate; ADR) are more substantial at limited-service hotels than at full-service hotels even though operating profitability (gross operating profit per available room; GOPPAR) is not substantially different between them. Eventually, increased minimum wage can play a beneficial role not only for the hotel industry but also for local society, since minimum wage employees take home a larger salary. | Keywords: | ADR Full-service hotels Goppar Limited-service hotels Minimum wage |
Publisher: | Pergamon Press | Journal: | Tourism management | ISSN: | 0261-5177 | EISSN: | 1879-3193 | DOI: | 10.1016/j.tourman.2020.104205 |
| Appears in Collections: | Journal/Magazine Article |
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