Forecasting in the lodging industry: Emphasizing regional economic factors

Budgeting and forecasting in the lodging industry may frequently involve the problems of inaccuracy and inefficiency, which may lead to a third problem, behavioral issues. To address these three common problems, this dissertation focuses on accuracy through quantitative analysis. Once accuracy is improved in budgeting and forecasting, efficiency would be expected to increase, and behavioral issues would be expected to decrease; The hotel revenues of all 50 states and the District of Columbia were tested for whether their hotel revenues were affected by the economic activity in three venues: the same state, the nation, or another state. Hotel revenues were represented by the lodging industry Gross State Product (GSP), or the economic value-added concept of each state for lodging. Economic activity was represented by the state GSP without hotel revenues, the U.S. GSP without the GSP of the state tested, and the GSP of another state. Correlation was used to identify the most likely explanatory variable. Regression was then used to test the validity and the strength of the explanatory variable. Each state was then categorized by which of these three economic factors (GSP) best explained hotel revenues of that state; This study demonstrates that economic factors can assist the lodging industry to increase accuracy in budgeting and forecasting, and a framework is provided for further testing