FROM REVENUE SHOCKS TO STRUCTURAL ADJUSTMENT: RETHINKING EMPLOYMENT EFFECTS OF MEGA CULTURAL EVENTS IN HERITAGE CITIES

DOI: https://doie.org/10.65985/APER.2026456765

Authors:

Dr. Ashish Kaushal

Keywords:

Mega cultural events; Event-driven tourism; Hospitality sector; Labour rigidity; Short-run adjustment; Revenue shocks; Pricing strategy; Capacity utilisation; Heritage cities; Employment effects; Hotel industry; Structural adjustment

Abstract:

Mega cultural events are frequently promoted as engines of tourism-led employment generation in heritage and pilgrimage destinations. While existing studies document significant short-term revenue gains in the hospitality sector, less attention has been paid to how firms structurally adjust to event-induced demand shocks. This study re-examines the employment effects of mega cultural events from a firm-level perspective. Using primary survey data from 102 accommodation establishments operating in Ayodhya during a government-sponsored mega event, the analysis investigates whether revenue shocks translate into short-run employment expansion or whether firms rely on alternative adjustment mechanisms. Employing logistic and ordinary least squares regression models, the study evaluates labour hiring, occupancy utilisation, and pricing behaviour. The findings indicate that although establishments experienced substantial revenue growth, this did not lead to proportional employment expansion. Instead, firms absorbed increased demand primarily through higher capacity utilisation and significant room rate adjustments. Premium establishments exhibited particularly strong price responses. These results suggest that event driven tourism may intensify utilisation of existing resources without producing durable structural employment change. The study contributes to the literature by distinguishing between aggregate economic impact and firm-level structural adjustment, offering a more cautious assessment of employment claims associated with mega cultural events.

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