A study of global and local factors that drive changes in hotels' revenue per available room (RevPAR) in eight major Asian cities found that the revenues for the hotels in these cities are strongly subject to global forces.

"When we initially interviewed the hotel managers, they listed many local events and factors as potential drivers of their revenue, and they were not focused on international forces. But we determined that local or regional events must be extremely large and even disrupting to offset the effects of global forces on hotels' revenue," said Moulton.

"For example, the 2008 Chinese Olympics and the 2010 Shanghai Expo moved the needle. Sadly, so did the 2011 Japanese tsunami and Thailand floods. Overall, however, global forces, such as Chinese and U.S consumer confidence had noticeable effects for these eight gateway cities."

One factor, the number of tourist arrivals, is always positively associated with RevPAR changes in the eight cities. Other factors have various levels of influence on revenues.

In addition to consumer confidence, two other factors that drive RevPAR in most of the eight cities are inflation and Chinese real estate development (as a proxy for China's GDP).

At one extreme, global factors explain over 90 percent of the changes in RevPAR in Seoul. At the other extreme, local factors explain 66 percent of the changes in RevPAR in Bangkok.

Moulton and her coauthors suggest that these findings give hoteliers a window into the factors that drive their properties' revenues and allow investors a mechanism to make a more accurate risk assessment.

The study, "Common Global and Local Drivers of RevPAR in Asian Cities," by Crocker H. Liu, Pamela C. Moulton, and Daniel C. Quan, is available at no charge from the Cornell Center for Hospitality Research. Liu, Moulton, and Quan are all faculty members at the Cornell School of Hotel Administration.