Determinants of Firm Survival in the Austrian Accomodation Sector

In this study, the authors use a parametric duration analysis to determine the survival rate of firms in the Austrian accommodation sector. Factors that contribute positively to the survival rate of entrants in the accommodation sector include larger initial size, a large share of young firms and fast market growth. High sunk costs and the location of businesses in major tourist destinations with a distinctive winter and summer season and a relative high average bed utilization rate further improve the odds of survival. The authors find an inverted U-shape hazard function supporting the liability of newness hypothesis. The hazard rate is lower than in the production of other market services but higher than in manufacturing.