{"title":"Optimal employment decisions in the hospitality sector under uncertain productivity loss due to catastrophe: A mean-variance utility approach","authors":"","doi":"10.1016/j.ijhm.2024.103850","DOIUrl":null,"url":null,"abstract":"<div><p>How do exogenous disruptions such as natural disasters affect employment and labour productivity in the hospitality sector? This article addresses this crucial issue by proposing a two-moment (i.e., mean-variance) decision model to determine the pattern of productivity and employment losses in this sector. In our model, a representative hotel owner selects the optimal employment level based on the risk-taking orientation of the manager. During a catastrophe, a high operational fixed investment cost causes optimal employment decisions for a hotel owner to become an endogenous choice variable. Our proposed model and a calibration exercise predict that, on average, as operational uncertainty increases, expected profits decrease substantially, causing managers to terminate employees. Government intervention in the form of a lumpsum grant can be beneficial, but the level of the grant should be contingent on the risk preference of the hotel management. For instance, restoring complete employment with a substantial lump-sum aid may take longer. We discuss the implications of our findings for hospitality sector research and tourism industry professionals.</p></div>","PeriodicalId":48444,"journal":{"name":"International Journal of Hospitality Management","volume":null,"pages":null},"PeriodicalIF":9.9000,"publicationDate":"2024-07-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"International Journal of Hospitality Management","FirstCategoryId":"91","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0278431924001622","RegionNum":1,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"HOSPITALITY, LEISURE, SPORT & TOURISM","Score":null,"Total":0}
引用次数: 0
Abstract
How do exogenous disruptions such as natural disasters affect employment and labour productivity in the hospitality sector? This article addresses this crucial issue by proposing a two-moment (i.e., mean-variance) decision model to determine the pattern of productivity and employment losses in this sector. In our model, a representative hotel owner selects the optimal employment level based on the risk-taking orientation of the manager. During a catastrophe, a high operational fixed investment cost causes optimal employment decisions for a hotel owner to become an endogenous choice variable. Our proposed model and a calibration exercise predict that, on average, as operational uncertainty increases, expected profits decrease substantially, causing managers to terminate employees. Government intervention in the form of a lumpsum grant can be beneficial, but the level of the grant should be contingent on the risk preference of the hotel management. For instance, restoring complete employment with a substantial lump-sum aid may take longer. We discuss the implications of our findings for hospitality sector research and tourism industry professionals.
期刊介绍:
The International Journal of Hospitality Management serves as a platform for discussing significant trends and advancements in various disciplines related to the hospitality industry. The publication covers a wide range of topics, including human resources management, consumer behavior and marketing, business forecasting and applied economics, operational management, strategic management, financial management, planning and design, information technology and e-commerce, training and development, technological developments, and national and international legislation.
In addition to covering these topics, the journal features research papers, state-of-the-art reviews, and analyses of business practices within the hospitality industry. It aims to provide readers with valuable insights and knowledge in order to advance research and improve practices in the field.
The journal is also indexed and abstracted in various databases, including the Journal of Travel Research, PIRA, Academic Journal Guide, Documentation Touristique, Leisure, Recreation and Tourism Abstracts, Lodging and Restaurant Index, Scopus, CIRET, and the Social Sciences Citation Index. This ensures that the journal's content is widely accessible and discoverable by researchers and practitioners in the hospitality field.