Determinants of Operating Revenues of European Travel Agency and Tour Operators Firms

This paper examines the variables determining operating revenues (OR) of more than 25, 000 European Travel Agency and Tour Operators Firms across European Union. Using the panel data obtained from BvD Amadeus and spanning the period 2010-2016, our research examines the impact of firm-level (total assets, number of employees, loans) and country-level variables (number of arrivals) on OR. Our results showed differences in OR determinants across different country groups (North vs South, where South countries are Portugal, Spain, Italy, Greece and Croatia while North countries are other EU member states). Using fixed effects estimator we found different sizes and statistical significances of the estimated coefficients of the OR determinants across firms operating in these two groups of countries. In the case of the firms operating in South countries, the estimated coefficient of the variable number of employees is significantly lower than for firms operating in North countries, indicating lower contribution to OR/productivity of employee in the case of firms operating in South. Completely opposite is true in the case of total assets variable, while size of loans is not significant determinant of OR. Finally, we find that number of tourists’ arrival has significant contribution to OR only for firms operating in the South countries.