Are Subsidies to Hotel Investment an Effective Tool to Enhance Regional Tourism? A Firm Level Analysis

This paper undertakes an ex-post evaluation of the impact of public subsidies aimed to co- finance capital investments of micro and small hotel businesses in the Province of Trento (Italy) within the Provincial Law 6/99 in the period 2002–2006. We considered two performance indicators: the occupancy rate and the revenues per room. We used a matching approach to quantitatively assess the impacts of subsidies. Our results show that public subsidies have a positive effect on revenues and occupation rates of hotels.