Small accommodation business growth in rural areas: Effects on guest experience and financial performance

Rural tourism development features growth of small accommodation businesses (SABs). The disparity between the applause that appreciates increased economic benefits from SAB development, and the criticism on its potential damage to rural tourism experience, makes it necessary to verify the exact consequences of SAB growth. Drawing on business growth theory, this study models, tests and compares the effects of SAB size on various guest experiences and financial performance in the context of a highly dynamic rural destination, the north of China's Zhejiang Province. Data was collected from 188 SABs and 873 guests, and analyzed through hierarchical linear modelling and multiple linear regression. The result points to a trade-off faced by entrepreneurs between enhancing guest experience and achieving economic goals as SAB size increases. Implications of the study for research and practice are also discussed.