The role of hotel owners: the influence of corporate strategies on hotel performance (original) (raw)
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The notion that a hotel's brand contributes significantly to the property's market value is supported by an analysis of nearly eleven hundred hotel transactions over the past fifteen years. The analysis found that brands added value beyond the usual contributors to a property's value, such as net operating income and revenue per available room. The effects of branding were most noticeable in midmarket and upscale hotels. Based on per-room sales statistics, certain brands added significantly more value to their franchisees' properties than others.
Cornell Hospitality Quarterly, 2010
Few dispute the value that a brand brings to a hotel property, but questions remain regarding exactly how the brand creates guest loyalty and how it creates value. Over the past twenty-five years, a brand flag has become an essential element of arranging a hotel development deal. Because of this, researchers have examined how brands influence top-and bottom-line revenues and overall asset value. Moreover, the effect of the brand on customer satisfaction seems to be affected by the brand's franchising strategy.
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Cornell Hotel and Restaurant Administration Quarterly, 2006
A study of more than nineteen hundred US hotels for the years 2002 and 2003 found that a hotel's net operating income percentage is most closely tied to its occupancy, although average daily rate (ADR) has a strong influence, as does market segment (also known as chain scale), the age of the property, and brand affiliation. A hotel's size (that is, number of rooms) and location (eg, urban or highway) also influence net operating income (NOI), but a hotel's region does not significantly affect NOI percentage. The year 2002 data ...
International Journal of Hospitality Management, 2011
By analyzing longitudinal data of more than 51,000 hotels operating in the United States during the previous economic cycle, it is possible to draw conclusions regarding the performance of branded hotels compared to independent operations under various economic conditions. The results of the study indicate that while branded properties experience significantly higher occupancy rate during the different phases of the economic cycle, independent hotels experience significantly higher average daily rate (ADR) and rooms revenues per available room (RevPAR) during the same time period. While branded hotels are faced with various payments attributable to the brand, such as royalty payments and other franchise fees, those fees do not have a deleterious effect on net operating income (NOI) compared to NOI for independent hotels, suggesting that independent hotels are unable to bring their ADR and RevPAR premiums to the bottom line despite their savings in franchise expenses. Instead, the results indicate similar NOI for branded hotels and independent hotels during economic expansion, but significantly higher NOI for branded hotels during economic recession. The results of this study suggest that the intangible asset value of hotel brands may not be a static construct, but may vary by time. Sources of such intangible value of brands may include shared resources, guest loyalty programs, and yield management systems. These results contribute insight into the complex hotel owner decision of choosing between a brand affiliation and independent operation.
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2016
This chapter builds elaborates the economic and marketing fundamentals that determine the existence and development of hotel chains, namely: brand recognition and significant role of the brand in choice of hotel by guests; high sunk costs; service standardisation; economies of scale; economies of scope; financial benefits of chain affiliation for the individual hotel surpass the affiliation-related costs<br>
Strategic Management Role in Boosting Hotel Performance
Polish Journal of Management Studies
The foremost aim of this paper is to examine the right linkage of specific market orientation, innovation strategy and organizational performance of 114 hotels in Malaysia. Data were drawn from census method on 475 hotels' top and middle managers who are responsible for the progress of innovation and market orientation of their hotel. These research findings confirmed that all hypotheses give valuable indications on the strategic linkage of specific market orientation and innovation strategy to pursue for improved organizational performance. The results highlighted hotels pursuing competitor orientation focused on process innovation. Hotels that pursue customer orientation focused on service innovation. The result shows that competitor orientation, customer orientation, process innovation and service innovation have a significant effect on organizational performance. Remarkably, this research found process innovation partially mediates the association between competitor orientation and performance, while service innovation partially mediates the association of customer orientation and performance. The paper develops an integrated model that link specific market orientation, innovation strategy and organizational performance of hotels in Malaysia.
In a recent worldwide survey of firms from various industries reported that 81 percent of companies having strategic business plan in one or another way. Furthermore, executives reported a higher level of business result with strategic business model is comparatively higher than the other management tools. The increasing popularity of strategic alliances in business in recent times attributed to accelerating changes in industries and facilitates to overcome global competitions. Firms that engage in strategic planning tend to have higher performance than those do not, business promoters and developers find strategic partnership method as one of the useful tools for the rapid business development. With the observance of all factors, the main objective of this research paper is to explore the current trends in small scale and budget category hotels' strategic partnership model; with special emphasis, the study identifies major factors that may create impacts on the performance of accommodation sector of Tamilnadu Tourism Development Corporation (TTDC); A Unit of Department of Tourism, Government of Tamilnadu. Firstly, the study observes the current competitive pressures facing by the chain of Hotels run by TTDC in detail with the help of official reports and secondary data, then, the empirical work involved the development of questionnaires which were used for primary data collection. The study sample consisted of official authorities, managers & staff at different levels from selected hotels of TTDC located in major tourism destinations of Tamilnadu. There follows an investigation and evaluation of a range of potential strategic alliance partners for the small hotel firm, assessing their ability to address the identified competitive pressures. Data interpretation reveals, Entering new markets and adjusts to change of market; Building of effective service delivery systems; Gaining access to new technology; Cost sharing, minimizing costs and pooling of resources; Innovation, knowledge sharing and embedded skills are resulted as a major motivational indicators and Occupancy rates; Business volume; Profit / Loss; Service quality; Customer satisfaction are resulted as a better performance indicators. Additionally, the findings also revealed the most important aspect in the adoption of marketing strategic alliances invariably increases the service quality and higher customer satisfaction followed by improving overall performance of the Hotels. The results also give another strong indication that the strategic alliance is playing a crucial role in the small and budget category hotels. Finally, the rationale for adopting the possible and suitable strategic partnership model suggested for profitable and sustainable hotel business.
Affiliation to hotel chains: hotels’ perspective
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Key sources when formulating competitive advantages for hotel chains, 2019
Th is paper's purpose was to identify the key sources when formulating competitive advantages of hotel chains. Th e research assessed the fi nancial activities performance included in annual hospitality industry reports and on their offi cial websites; questioning of loyal and potential customers; the fi ve-point Likert scale and the Pearson correlation coeffi cient were applied to understand the possible consumer reaction to a certain competitive advantage or its absence. Th e paper confi rms the eff ectiveness of key sources used by management to win and retain competitive advantages: despite strong dependence on the economic cycle phase etc., after the devastating crisis of 2007, 2008, but also to achieve sustainable growth. All the networks examined over the last decade have expanded their presence in international markets, diversifi ed the portfolio of brands, increased the number of jobs and profi ts. It was also proved that the opinion of the fi nal consumer is still not suffi ciently taken into account in the assessment of the Pearson correlation coeffi cient (the latter allowed the authors to propose their own defi nition of the competitive advantage in the industry). Th e paper attempts for the fi rst time to consider the competitive advantages of hotel chains from the point of view not only of theorists and business practitioners, but also with the view of the opinion of the services consumer; there were identifi ed the discrepancies, which consideration would allow to increase the level of guest satisfaction and, accordingly, the effi ciency of the hotel business. In future papers, the authors plan to verify the existence of a correlation between the degree of guest loyalty to a particular hotel network and the main fi nancial results of its activities.
Key sources when formulating competitive advantages for hotel chains
Turizam : međunarodni znanstveno-stručni časopis, 2019
This paper's purpose was to identify the key sources when formulating competitive advantages of hotel chains. The research assessed the financial activities performance included in annual hospitality industry reports and on their official websites; questioning of loyal and potential customers; the five-point Likert scale and the Pearson correlation coefficient were applied to understand the possible consumer reaction to a certain competitive advantage or its absence. The paper confirms the effectiveness of key sources used by management to win and retain competitive advantages: despite strong dependence on the economic cycle phase etc., after the devastating crisis of 2007, 2008, but also to achieve sustainable growth. All the networks examined over the last decade have expanded their presence in international markets, diversified the portfolio of brands, increased the number of jobs and profits. It was also proved that the opinion of the final consumer is still not sufficiently taken into account in the assessment of the Pearson correlation coefficient (the latter allowed the authors to propose their own definition of the competitive advantage in the industry). The paper attempts for the first time to consider the competitive advantages of hotel chains from the point of view not only of theorists and business practitioners, but also with the view of the opinion of the services consumer; there were identified the discrepancies, which consideration would allow to increase the level of guest satisfaction and, accordingly, the efficiency of the hotel business. In future papers, the authors plan to verify the existence of a correlation between the degree of guest loyalty to a particular hotel network and the main financial results of its activities.