Key drivers of the financial performance in the hospitality industry: Barcelona hotel industry

Touristic sector has been one of the few sectors in Spain that has contributed positively to employment and economic growth. The hospitality industry is facing major challenges with the role that new technology is playing in marketing strategies but also with a new supply from substitutes products, being apartments rented through different websites, a major new player. In this context academic literature has made several efforts in trying to determine the key drivers in hospitality industry. Analyzing data from a sample of 42 hotels in Barcelona, mainly information from the annual reports, we have checked several hypotheses about the correlation between different variables: size, star category, the competence by the new supply from rented apartments, the level of leverage and the productivity with economic performance; that has been measured using the return on equity. Some of our results confirm the evidence found by other researchers but there is also some new correlations, like the presence of a significant degree of competitors, mainly apartments, and its negative effect in profitability that are new to the literature.