What determines multinational hotel groups’ locational investment choice in China?

Abstract China's hotel industry has been developed quickly from a small number of 137 only in 1978 to 14,237 in 2009. One of the main drivers of the rapid development of the hotel industry has been the expansion of multinational hotel groups (MHGs) into China. The purposes of this study are to analyze the factors that determine the location strategies of MHGs and to assess what factors determine MHG's investment strategies in regard to choice of location. The study finds that the market demand and market size measured by number of inbound tourists, tourist spending, and actual foreign direct investment, the business environment measured by GDP per capital, and dummy variables measured by policy and mega events are all significant factors in affecting MHG's locational choices for investment. These findings may provide some insights for MHG's future investment strategies in regard to location choice.

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