Determinants of Growth in Portuguese Small and Medium-Sized Hotels: Empirical Evidence Using Panel Data Models

Using dynamic panel estimators, based on a sample of 177 small-and medium-sized Portuguese hotels for the period 2000–2009, this paper studies the determinants of growth in small- and medium-sized Portuguese hotels. The multiple empirical evidence obtained allows the authors to conclude that: (a) small hotels grow more quickly than large ones, but only for lower levels of size; (b) age and the financial crisis of 2008 are restrictive determinants of growth in small- and medium-sized Portuguese hotels; and (c) cash flow, government subsidies and labour productivity are positive determinants of growth in small- and medium-sized Portuguese hotels. The authors also find that the financial crisis has increased the importance of cash flow and government subsidies for increased growth in small- and medium-sized Portuguese hotels. Finally, the financial crisis of 2008 has contributed to the role of debt and interest paid as restrictive determinants of growth in these hotels.