Seasonality of hotel business - what is the way to combat extreme seasonality of business?

In the doctoral thesis "Analysis of the impact of hotel characteristics on the seasonality of business" author Goran Ćorluka, Head of the Department of Trade Business at the University Department of Professional Studies, Split, under the mentorship of doc ....

In the doctoral thesis "Analysis of the impact of hotel characteristics on the seasonality of business“Author Goran Ćorluka, Head of the Department of Trade Business at the University Department of Professional Studies, Split, under the mentorship of doc. Dr. Sc. Smiljana Pivčević, dealt with a crucial issue of the Croatian hotel industry. The Croatian hotel industry, internationally established in the tourist product sun and sea, is facing a concentration of demand at the peak of the tourist season, with capacities remaining underused for the rest of the year. Hotels are exposed to unprofitable and unprofitable business, and the drastic situation is indicated by the results of research in the doctoral thesis.

The research included 218 hotels on the Dalmatian coast, and according to the results of the research, the business year is divided into three seasons: low, secondary i high season. The following is an overview of the months with the corresponding occupancy rate of hotel accommodation capacities by seasons. The low season consists of January (4,30%), February (5,27%), March (9,14%), November (6,51%) and December (4,95%). In five months of the year, the average occupancy rate of hotel accommodation is only 6,04%. The middle season consists of April (21,72%), May (47,45%) and October (32,98%). The average occupancy rate in the seasonal period, which should be the mainstay of the main tourist season, is 34,05%, so only a third of the hotel capacity is full. The high season consists of June (65,58%), July (80,76%), August (87,29%) and September (69,48%). Considering that Croatian tourism almost exclusively depends on this seasonal period, the average occupancy rate of hotel accommodation capacities of 75,78% is not satisfactory. According to the above, it can be concluded that the situation is alarming.

The question is how do hotels manage to survive given the high share of fixed costs and business inelastics?

According to the author, hotel management is aimed at increasing revenue per available capacity, which means that it is not taken into account how to increase occupancy but how to charge as much as possible for filled capacity. Being profitable at such a low occupancy rate is only possible by setting accommodation prices in the peak season to cover the lack of income in the off-season. However, until when will the demand be willing to pay for hotel accommodation in Croatia many times more expensive than in the rest of the Mediterranean.

The doctoral thesis identifies the issue of seasonality in the hotel industry and examines the impact of hotel characteristics on the occupancy rate of accommodation capacities in the seasonal periods of low, middle and high season. The results indicate that hotels with a higher category, larger hotels, hotels with a convenient location, hotels connected to a hotel group and hotels market-oriented to the business segment have less seasonality of business. The special contribution of hotel features in the rate of occupancy of accommodation facilities stands out in the middle season. The contribution of the hotel category is on average 12,89%, the size of the hotel on average 6,62%, the location of the hotel on average 11,71%, the form of hotel business on average 10,13% and the market orientation of the hotel on average 18,99% in total occupancy rate of accommodation capacities in this seasonal interval. The middle season is followed by the high season in terms of contribution, namely in the high season the hotel category contributes to the total occupancy rate of 5,84%, hotel size on average 8,36% and the form of hotel business on average 17,82%. The contribution of the observed characteristics of the hotel is the lowest in the low season, in which only the market orientation proved to be a significant determinant of the occupancy rate of accommodation capacities, on average 6,04%.

According to the author's guidelines, the development policy of hotel accommodation in coastal holiday tourism destinations should be aimed at restructuring accommodation capacities - by building new highly categorized hotels and renovating existing hotel facilities, increase the share of high quality hotels, increase market share of large hotels. and additional hotel facilities, intensify the development of hotel chains on the Croatian market, which would achieve the benefits of doing business under the hotel chain, and improve the hotel offer aimed at the business market segment - one of the fastest growing market segments.

The author also emphasizes the importance of a tourist destination to the hotel business. The demand for hotel accommodation depends on the destination demand, if the destination does not attract demand, there will be no demand for individual service providers in the destination. In order for the destination to attract demand, especially in the middle and low seasons, significant efforts are needed at the local, regional and national levels.

It should be pointed out that the culprit for the extreme seasonality of the Croatian hotel industry should not be sought on the demand side, but on the supply side. Croatia has failed to make a step away from an internationally recognized bathing destination. Croatian tourism is formed in a way that meets the needs of demand motivated by bathing tourism. It is necessary to raise awareness of demand through marketing activities about the advantages of coming to Croatia outside the high tourist season. Develop accompanying tourist facilities that will complete the stay of tourists and increase tourist spending. Valorize other tourist resources and develop selective forms of tourism such as health, sports, cultural, rural, ecological, etc., for which it is necessary to make Croatia available to tourist demand, ie to develop transport connections with major emitting markets, which primarily means intensifying development airlines throughout the year.


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