Macro and non-macro explanatory factors of Chinese hotel stock returns

This study investigates the link between macro and non-macro explanatory factors and Chinese hotel stock returns. Macro variables include growth rates of industrial production and imports, discount rates, yield spread and inflation rate. In addition, growth rate of total foreign tourist arrivals (ΔTA) was introduced as another critical macro factor that may affect Chinese hotel stock returns, considering a tremendous growth of tourism in China. Empirical results indicated that the impact of ΔTA was positive, but insignificant. Thus, Chinese hotel stock returns were more sensitive to general macro variables. Non-macro events that could significantly impact Chinese hotel stock returns encompass financial crises, natural disasters, wars, terrorist attacks, political events, and sports mega-events. Discussions and conclusions are provided to guide hospitality investors.