Examining the hotel room supply and demand in Las Vegas: A simultaneous equations model

The Las Vegas Strip has seen astonishing tourism development in the 1990s. The study examined the inter-relationship between the room supply and demand functions, and room rate in Las Vegas employing econometric variables in a simultaneous framework during 1992–1999. The results suggest that room ra...

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Bibliographic Details
Published in:International journal of hospitality management 2006-09, Vol.25 (3), p.517-524
Main Authors: Tsai, Henry, Kang, Bomi, Yeh, Ronnie J., Suh, Eunju
Format: Article
Language:English
Subjects:
Econometric
Las vegas
Room supply and demand
Two-stage least squares
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Summary:The Las Vegas Strip has seen astonishing tourism development in the 1990s. The study examined the inter-relationship between the room supply and demand functions, and room rate in Las Vegas employing econometric variables in a simultaneous framework during 1992–1999. The results suggest that room rate for the current month, the 3-month Treasury bill rate and gaming revenue per room for the 12-month prior are the three determinants of the room supply function, while consumer price index for the current month is the only determinant of the room demand function.
ISSN:0278-4319
1873-4693
DOI:10.1016/j.ijhm.2005.01.004