5. Discussion, conclusions, and implications
This article analyzes the degree to which the internal business knowledge or the typical knowledge sources of the tourist destination affect the profitability of Spanish vacation hotels situated on the Mediterranean coast of the Iberian Peninsula and the Balearic Islands. As highlighted above, knowledge is one of the main sources of competitive advantage that a firm can have nowadays; hence why the hypotheses of this article focus on contrasting the hotels' knowledge sources with how those sources link to profitability. Aspects such as the size or category of an establishment increase revenues as well as costs, but the difference between them determines the final profitability. Thus, in the first case, larger-sized hotels are usually less profitable because their costs increase to a greater extent than their revenues do. Exactly the opposite happens with regard to establishment category. Revenues tend to grow more than costs in higher-category establishments, thus positively affecting profitability.
