The effect of weather on the demand for rooms in the Taiwanese hotel industry: An examination

• We examine the effects of weather on room demand in the hotel industry.
• Our data indicates that the negative consequences of weather are very costly for hotels.
• The results suggest that weather plays the role of a moderator on the effects of price on room demand.

Many studies have already been conducted to understand the influence of climate on tourism destination choices. Different from those studies, our study examines the effects of weather on room demand in the hotel industry. We also investigate the moderating effect of weather on the relationship between hotel price and quantity demanded. In our research, weather is measured by the length of typhoons, the temperature, the number of hours of bright sunshine and the number of rainy days. Using panel data methods, our results show that firstly, typhoon and rain are negatively associated with group visitors while temperature and sunshine hours lead to an increase of group visitors. Typhoon and rain affect the relationship between price and room demand. Secondly, typhoon, temperature and sunshine hours have positive and significant effects on free independent travelers (FIT) but rain has a negative effect. The relationship between price and quantity also depends on rain, temperature and sunshine hours.