It affects,it affects not: A quasi-experiment on the transfer effect of co-branding on consumer-based brand equity of hospitality products

Although co-branding is postulated to be beneficial for hospitality brands, empirical test of either transfer effect or spillover effect of co-branding on consumer-based brand equity (CBBE) of hospitality brands is yet to receive attention from researchers. A quasi-experiment design was applied to test the transfer effect of co-branding on the CBBE of the composite brand, controlling for the familiarity, compatibility (fitness) and complementary of the partner brands. A within-subject (repeated measures) design with four steps measuring the CBBE of internationally known and compatible hotel and restaurant brands and their co-brand, as well as respondents’ own most familiar hotel and restaurant brand and their co-brand was applied in four steps to a class of 46 students enrolled for a tourism and hospitality class at a Tourism and Hotel Management School based in Asia. The t-test of differences revealed that the co-brand of the internationally known and compatible hotel and restaurant brands lead to synergy with both brands being winners and none losers, while the co-brand of respondents’ own most familiar brands lead to losses mostly, despite their high ratings individually. Implications and future research suggestions are provided.     

The Determinant of the Hospitality Industry's Unsystematic Risk: A Comparison Between Hotel and Restaurant Firms

ABSTRACT

Unsystematic risk is accepted as an important factor in stock valuation. Despite the importance, little has been done to study the relationship of unsystematic risk to stock values in the hospitality industry. This study attempted to advance the understanding of financial variables that could be related to unsystematic risk of hospitality firms. Regression models were developed for hotel and restaurant firms, using unsystematic risk as the dependent variable and financial variables as independent variables. The major findings of this study indicate: 1) more profitable hospitality companies have less unsystematic risk, 2) reducing reliance on debt financing could reduce unsystematic risk, 3) the positive relationship between operating leverage and unsystematic risk, suggesting that decreasing operating leverage could mitigate the stock price volatility of hospitality firms, and 4) large hotel and restaurant firms have less unsystematic risk than small firms. This study should help management of hospitality firms incorporate effects of shareholder expectations into their operational decision making as an integral part of long-range financial planning.     

Enhancing customer-based brand equity through CSR in the hospitality sector

ABSTRACT

Corporate social responsibility is considered an important element in the development of brand equity. Extant research in this context is mainly focused on the relationship between this corporate philosophy and financial performance, overlooking its potential to develop competitive advantages through brand equity dimensions. The aim of this research is to explore the impact of socially responsible aspects on hotel brand equity. To test the proposed model personal surveys of hotel customers were conducted. A structural equation model was developed to test the research hypotheses. The findings show that corporate social responsibility has positive effects on brand image, perceived quality, brand awareness, and brand loyalty.     

Using segmentation to compete in the age of the sharing economy: Testing a core-periphery framework

Airbnb has emerged as a credible competitive threat to the hotel industry. Consequently, hotel brands are having to rethink the experiences they provide to customer in an increasingly competitive environment. Despite these trends in the industry, experience-related research that examines and informs these developments remains under-represented in the hospitality and tourism literature. The present study offers a systematic approach to examine the potential differences in experiential consumption in the accommodations industry. Using a multiple-group analysis approach, it examines the moderating effects of individual characteristics and situational factors on the nature and dynamics of experiential consumption in the accommodations industry. The findings of the study culminate in the core-periphery framework of the hospitality consumption experience that can provide a relevant theoretical lens for future research into the different sectors and types of experiences within the hospitality and tourism industry. The study also outlines important implications for the hotel industry’s strategic experience design initiatives, from the standpoint of product development, the segmentation, targeting and positioning (STP) process, and marketing communications.     

Capital structure in the hospitality industry: The role of the asset-light and fee-oriented strategy

An asset-light and fee-oriented strategy (ALFO), which reduces risk and facilitates firm growth with minimum capital investment, has increasingly gained attention from industry practitioners and academic scholars alike, especially in the service sector like the hospitality industry. We empirically examine how ALFO is employed and how it is related to the capital structure, i.e. the proportion of debt and equity financing, in hospitality firms. Using a sample of 982 firm-year observations over the period 2002–2016, we find that ALFO is widely used by the hospitality industry, and as expected, the fee-income ratio and the degree of franchising have increased, while asset tangibility and capital intensity have decreased. Interestingly, although ALFO is positively related to long-term debt ratios of hospitality firms, our sub-sector analyses indicate that the relationship is only significant in the restaurant sector and not in the hotel sector. Our study contributes to the literature by identifying an important industry-specific variable that affects the capital structure of hospitality firms.     

Evaluation of hotel brand competitiveness based on hotel features ratings

Understanding the competitiveness of hotel brands is important for hotel managers to shape their brands and initiate effective marketing strategies and business developments. However, evaluating hotel brand competitiveness is challenging due to the complexity of information involved. A hotel brand often comprises many hotels with different performances. Hotel brands are also evaluated against multiple hotel features, thereby making the application of traditional evaluation techniques impractical. This paper introduces a novel technique for automatically evaluating the competitiveness of hotel brands based on probability distribution and earth mover’s distance. We demonstrate the effectiveness of our proposed method by conducting a case study that involves major hotel brands in Hong Kong. The proposed method can be applied in various contexts and can help researchers and managers evaluate the competitiveness of hotels as well as other branded products in the hospitality and tourism sectors.     

Corporate brand strategy: Drivers and outcomes of hotel industry’s brand orientation

The MNC resellers are vastly competitive and capital-intensive. Based on the corporate brand orientation, the objective is to investigate how the individual dimensions of hotel industry’s brand orientation can improve a corporate experience and subsequently create superior hotel performance and retailer preferences. A model of the integration of the hotel industry’s brand orientation was tested in a survey conducted among MNC resellers from hospitality industry. Structural equation modelling was applied to gain insight into the various influences and relationships. The research makes two main contributions. It makes a theoretical contribution by classifying the integration of the hotel industry’s brand orientation for hospitality industry and from this extrapolate key suggestions for further study. The continuous evolution and economic influence of the hospitality industry require the application of innovative marketing practices.     

Advertising and Firm Risk: A Study of the Restaurant Industry

Incorporating recent calls for understanding firm equity risk in relation to a firm's marketing efforts, this study examined the impacts of firm-level advertising spending on firm equity risk with publicly listed firms in the restaurant industry—a key hospitality industry. This study hypothesized and tested the effects of firm-level advertising expenditures on different types of firm equity risk (i.e., total, systematic, and unsystematic risk). Unlike previous empirical findings, we found that an increase in advertising expenditures significantly increased total and unsystematic risk of sampled restaurant firms. The findings provide new insights into the effects of advertising on firm equity risk in the literature, and important theoretical and managerial implications for restaurant firms.     

A Proposed Research Agenda for the Refinement of the High Performance Work System Construct in the U.S. Restaurant Industry

Abstract

The current research proposes a framework for the investigation and conceptualization of high performance work systems in the U.S. restaurant industry. The projected U.S. restaurant industry sales for 2006 are $511.1 billion according to the National Restaurant Association (National Restaurant Association, 2005). Because of its size and impact on the foodservice industry and the hospitality industry in general, improving the performance of the restaurant industry could help increase overall revenues and guest satisfaction in the foodservice and hospitality industry. By identifying a list of high performance work practices in the industry, a more in-depth exploration of these practices and then organizational policies can be aligned together to help improve overall performance in the U.S. restaurant industry. The current study provides theoretical background and support for the high performance work systems theory.     

Virtual reality is so cool! How technology innovativeness shapes consumer responses to service preview modes

Today’s hospitality brands often gain a competitive advantage through being cool and employing cutting edge technologies. Virtual Reality (VR) is one of the most novel tools to advertise brands, introduce new products/services, and draw customers. Despite the marketing potential of VR, there is scant research revealing the psychological processes associated with the use of VR as a cool technology. To bridge the gap in the current literature, this research examines how consumers with different degrees of technology innovativeness respond to marketing of hospitality brands through three main service preview modes: VR, static images, and 360° tour. The findings from a lab experiment show that as consumers’ technology innovativeness increases, VR boosts self-brand connection that consequently elevates their visit intentions toward the hotel brand. The findings from this study would help hospitality marketers better target their efforts at a specific consumer segment.     

The interaction between individual cultural values and the cognitive and social processes of global restaurant brand equity

The aim of this study is to increase understanding of the relationship between brand equity and individual cultural values in the marketing strategies of global restaurant brands. The study developed three research models and investigated global brand equity from the perspective that global brand equity has an impact on individual cultural values. The three models were tested using structural equation modeling (SEM) analysis. The findings indicate that both cognitive process and the social process of brand equity have an effect on cultural values. In particular, social process elements such as brand prestige and brand identification can reduce the risk of consumer uncertainty. This study contributes to the understanding of the relationship between global restaurant brand equity and individual cultural values, and the hierarchy of individual cultural values that has not, to the best of our knowledge, been explored in previous research.     

Fashionable hospitality: A natural symbiosis for Hong Kong's tourism industry?

Despite the well-accepted synergy between shopping and tourism, co-branding between hotels and retail brands has not been realized by either academia or practitioners. Considering the international recognition of retail brands, hotel and retail co-branding may be a sustainable competitive advantage, especially in shopping destinations such as Hong Kong. Using a one-shot cross-sectional design, this study investigated potential consumer reactions and preferences about likely hotel and retail co-branding in Hong Kong and mainland China. Findings indicated several opportunities as well as threats for hotels and retail brands as well as the need to understand specific markets, especially mainland Chinese before venturing into hotel and retail co-branding. Practical implications and future research suggestions are provided.     

Social servicescape’s impact on customer perceptions of the hospitality brand – The role of branded social cues

This research examines how the social servicescape (i.e., employee-customer, employee-employee and customer-customer) impacts brand-related outcomes via branded social cues. Informed by theories related to cue consistency and conceptual fluency, results from three experimental studies conducted across sectors and scales of hospitality businesses (i.e., luxury hotel, high-end restaurant and limited-service hotel), indicate that branded social servicescape cues have direct, indirect and interactive effects on brand-related outcomes. In luxury contexts, when the brand’s personality is absent in employee-customer social cues, the negative effects were buffered if brand personality is reflected in employee-employee social cues. Conceptual fluency mediated the relationship between branded employee-customer social cues and brand-related outcomes, which was moderated by branded employee-employee social cues. Conceptual fluency also mediated the relationship between branded customer-customer social cues and brand-related outcomes. This research sheds light on how hospitality firms can leverage branded social cues to enhance customer evaluation of the hospitality brand.     

Creating a model of customer equity for chain restaurant brand formation

The purpose of this research was to create and test a model of customer equity for chain restaurant brand formation. It has long been acknowledged that managing and enhancing customer equity influences a company's shareholder value, which is a reflection of long-term financial performance. A review of the current literature revealed three key determinants of customer equity: (1) value equity, (2) brand equity, and (3) relationship equity. Six hypotheses were derived and, based on data analysis, all six were supported. Value, brand, and relationship management were all confirmed to be important factors in enhancing customer equity in the chain restaurant industry. Further, brand equity has the strongest impact on the development of customer equity in this particular industry. Relationships among value equity, brand equity, and relationship equity were also identified. Managerial implications are discussed.     

Hotel Guest Satisfaction and Brand Performance

ABSTRACT

The value and significance of guest satisfaction, brand management, and franchising in the hotel industry have been well documented and researched as independent topics. While previous research has suggested that franchising has an overall negative effect on hotel quality, it has rarely investigated the important links between hotel brand performance and guest satisfaction, and the role of brand franchising strategy in the relationship between hotel brand performance and guest satisfaction. This study examines the relationships among guest satisfaction, revenue performance and growth, and franchising strategy at the hotel brand level. Results indicate that guest satisfaction is a key to brand growth, while the positive effect of guest satisfaction on brand revenue performance is moderated by the extent of franchising within each brand.     

Exploring the Use of Activity Based Costing in the Restaurant Industry

Abstract

Traditional cost accounting systems have been replaced in recent years in the manufacturing sector by Activity Based Costing (ABC) systems. In spite of this trend in manufacturing, ABC systems have made few inroads in the services and hospitality sector, particularly in the restaurant industry. In this study, restaurant controllers in the United States were surveyed to identify their knowledge about, and use of, ABC systems. The results show that the use of ABC in the restaurant industry is almost non-existent for a variety of reasons. However, restaurants may be an ideal setting for the application of ABC tools due to the inherent characteristics of the industry.     

Do members want the bells and whistles? Understanding the effect of direct and partner benefits in hotel loyalty programs

ABSTRACT

As a way of increasing the perceived value of hotel loyalty programs, hoteliers are partnering with non-hotel brands to differentiate and drive member engagement. We examine the effect of such strategic alliances on the loyalty to a member program and further test a structural equation model with n = 469 active loyalty members. Our model investigates whether tier status and satisfaction function as mediators of the effects of a strategic alliance on brand loyalty. Our findings indicate that the benefits that loyalty programs and partnerships with non-hotel brands offer can positively influence brand loyalty when the member’s tier status and satisfaction mediates.     

Gender,loyalty card membership,age, and critical incident recovery: Do they moderate experience-loyalty relationship?

The study examines the critical role of customer experience in determining hotel brand loyalty and the moderating role of gender, loyalty card membership, age, and critical incident recovery in this relationship. Based on a sample of 408 hotel guests and employing structural equation modeling approach, dimensions that comprise ‘customer experience with hotel brands’—hotel location, hotel staff competence, hotel stay, and ambience, hotel website and social media, and guest-to-guest experience—are found to have relative effects on hotel brand loyalty. The results contribute to hospitality realm by suggesting the moderating effect of gender, loyalty card membership, age, and critical incident recovery on customer experience-loyalty relationship. Implications for managerial practice and theory are discussed together with limitations and further research directions.     

The Role of Training in Achieving TQM in Restaurants

Abstract

TQM, and its application to the hospitality and tourism industries, has begun to receive more attention in the literature. However, few articles focus exclusively upon TQM in the restaurant industry and fewer still have examined the relationship between TQM and employee training. This article examines this relationship through interviews with managers with two prominent restaurant chains in Canada.     

The roles of brand equity and branding strategy: A study of restaurant food crises

Food crises, such as food borne illnesses, are a major threat to the restaurant industry. However, consumer responses to a food crisis are expected to differ depending on the brand equity and branding strategy of the restaurant involved. In order to test the roles of brand equity and branding strategy in a food crisis situation, this study used a scenario-based experimental survey with a 2 (brand equity: Low/High) × 2 (branding strategy: Corporate branding/House-of-brands) × 2 (presence of crisis: No/Yes) design. The results of the study supported the “amplifying” perspective by providing evidence of the negative role of brand equity during a crisis. Moreover, the three-way interaction between brand equity, branding strategy, and presence of crisis revealed the effectiveness of the corporate branding strategy, which varies depending on the level of brand equity, under crises. The findings of this study will enable marketers to develop appropriate post-crisis strategies based on predicted consumer responses depending on the level of brand equity and branding strategy. Further discussion and implications are provided in the text.