The asset-light business model and firm performance in complex and dynamic environments: The dynamic capabilities view

Although academic research examining the effects of the asset-light business model continues to grow in the tourism and hospitality literature, the extant studies lack comprehensive theoretical foundations to develop and establish clear quantitative models of analysis. Inconsistent findings from these studies call into question the issue of their exploratory nature. Using the dynamic capabilities view, this study provides a solid conceptual framework that recognizes the asset-light business model as an industry-specific dynamic capability for lodging firms. Furthermore, this study extends recent theoretical accounts on the moderating role of environments in the dynamic capabilities-performance relationship by focusing on the service-oriented and cyclical nature of the tourism and hospitality industry. Incorporating industry-specific performance measures, the current study suggests an alternative approach to the analysis of performance of a lodging firm. The findings also provide important implications to help lodging owners, managers, and investors to strategically cope with complex and dynamic environments.     

Deal characteristics and M&A performance: How do hospitality firms fare?

The global hospitality industry has experienced significant consolidation in the past several decades. While evidence in the general business literature suggests that the target firm shareholders gain instead of the acquiring firm shareholders, some studies in the hospitality industry have suggested that mergers and acquisitions (M&As) are also beneficial to acquiring firms. Using a comparative study design and a comprehensive sample over 41 years, we empirically examine whether M&As create more value in the hospitality industry than in other industries and whether certain deal characteristics may explain the potential performance differential. Overall, we find that M&As in the hospitality industry outperform M&As in non-hospitality sectors. When examining deal attributes, we find that relative size of target, cash method of payment, and an unlisted target are characteristics positively related to merger performance and help explain some of the performance differential. We contribute theoretically and empirically to the literature by demonstrating that industry and deal effects play an important role in M&A performance.     

The influence of exploitative leadership on hospitality employees’ green innovative behavior: A moderated mediation model

Growing awareness of environmental sustainability in the hospitality sector has made employee green innovative behavior an important element of their establishment’s performance. Drawing from ego depletion theory, this paper aims to study how and when exploitative leadership influences hospitality employees’ green innovative behavior. We collected data from 467 full-time hospitality employees and their direct leaders in 96 teams, and examined a cross-level moderated mediation model employing multilevel path analysis. The results showed that exploitative leadership in the hospitality sector negatively associates with hospitality employees’ green innovative behavior, mediated by their emotional exhaustion. The results further showed that perceived organizational support moderates the influence of exploitative leadership on emotional exhaustion and subsequent green innovative behavior. Implications for theory and practice in the hospitality sector are discussed.     

Hospitality management study programme and students’ perceptions: universities in South Africa

This study using a questionnaire survey of 200 hospitality management students in two South African Universities assessed the perceptions of these students towards their study programme, the support they get while studying, and their intention to work in the hospitality sector over the long-term. Results from data analyses indicate that the students are generally satisfied with their study and would recommend hospitality management as a study programme to friends and relatives. Many of them also expressed the desire to work in the hospitality sector over the long-term. Their major concerns towards their study are in the areas of inadequacy of the hospitality management curriculum to address their study needs, the fear that fulfilling jobs will not be available for them after graduation, and their lack of knowledge regarding public and private funding for hospitality entrepreneurship activities. This study therefore calls on hospitality management study programme managers in South Africa to include entrepreneurship courses that address how graduates can source public or private funds to start up their own hospitality businesses, to decrease dependence on employers. Graduates with comprehensive and integrated knowledge of the hospitality sector operations and opportunities will not have fear of getting jobs and performing well in the sector.     

Authenticating the learning environment

The research documented in this paper argues that the authentic learning environment is achievable through “academic practitioners” who can ground business education and research within practice. A culture fostering the academic understanding of the practitioner environment enables practical engagement with academic rigour. The case study illustrates specific examples from degree programmes engaging with student and academic voices, with a particular focus on the development of authentic learning experiences for tourism and hospitality students. Key aspects of business education need embedding within the development of tourism and hospitality curricula in order to engage with the tacit knowledge required by the sector through a holistic approach to curriculum development.     

The effects of product diversification on firm performance and complementarities between products: A study of US casinos

In spite of the growing importance of product diversification strategy and the existence of varying degrees of product diversity in the US casino industry, research of the effect of product diversification on firm performance has been sparse. By examining the impact of the degree of product diversification on both financial market- and accounting-based firm performance of sampled US casinos and complementarities between products, this study attempts to fill the gap in the hospitality literature. Results of this study show an inverse U-shaped relationship between the degree of product diversification and firm performance and complementarities between gaming business and food and beverage (F&B) business. These findings suggest that US casinos take into account both costs and benefits associated with product diversification, and consider F&B operations more preferentially as a supplementary business when implementing product diversification strategy.     

Competitive advantages of franchising firms and the moderating role of organizational characteristics: Evidence from the restaurant industry

This study investigates the effects of a firm’s involvement in franchising on efficiency and differentiation as defined in Porter’s generic competitive strategy framework. The study further examines the moderating effects of organizational characteristics (prior experience in franchising and business type) on the relationship between franchising and efficiency and between franchising and differentiation. Results indicate that as a firm increases its involvement in franchising, differentiation increases, but efficiency does not. Furthermore, prior experience enhances the effects of franchising on efficiency and differentiation, while business type only enhances effects on differentiation. The findings suggest that as an interconnected governance structure, franchising offers benefits to franchisors by helping them develop competitive advantages and outperform their competitors in the market. By discovering the detailed channels through which hospitality firms could achieve business success, this study contributes to existing literature on franchising and hospitality management and provides guidance for industry practitioners.     

The real estate risk of hospitality firms: Examining stock-return sensitivity to property values

The value of a hospitality firm is often believed to be dependent on the market price of the properties they own. However, the core business of a hospitality firm is the production of products and services. Since the real estate assets are depreciated throughout their useful life, short-term covariance of firm value with real estate prices seems implausible. Using a two-factor model, the current study examined the real estate exposure of US hospitality firms through daily stock return data from 2005 to 2009. Results indicate that the majority (88%) of the hospitality firms were exposed to real estate risk at some point during the sample period, while the second-stage analysis of real estate betas suggests that exposure is conditional on the financial status of the hospitality firm. Implications and suggestions for future research are presented with the findings of the study.     

Enhancing hospitality business performance: The role of entrepreneurial orientation and networking ties in a dynamic environment

Utilizing a sample of 192 hospitality firms, this study investigates the moderating role of a dynamic environment, coupled with business and social networking ties and technology resources, on the relationship between entrepreneurial orientation and organizational performance in hospitality firms. This research is novel in that we adopt business network ties and social network ties as two moderating variables along with technology resources between entrepreneurial orientation and business performance, providing evidence on a topic which has received little attention to date. The results posit that in an uncertain, dynamic environment a higher level of risk and entrepreneurial orientation benefit business performance especially when coupled with strong business and social networks.     

Motivations for entrepreneurship in the tourism and hospitality sector: A social cognitive theory perspective

A critical examination of the literature suggests that further work is needed to understand the relationship between small tourism and hospitality businesses and their external social-economic environments. In particular, the nature of personal and environmental factors influencing tourism entrepreneurship remains unknown. Focusing on one type of small business, guest houses, this study aims to examine entrepreneurs’ motivations from a dynamic perspective and explore the nature of personal and environmental factors affecting motivations for entrepreneurship. Taking a qualitative approach, four patterns of change in (or maintenance of) motivation are identified. Guided by social cognitive theory, this study finds that, among the relevant personal factors are cognitive beliefs, intrinsic needs, and demographic factors, while the environmental facilitators include changes in the tourism market, changes within the industry, and changes in setting/location. Finally, a model of small business operators’ motivations for engaging in entrepreneurship in the tourism and hospitality sector is proposed.     

Hospitality innovation strategies: An analysis of success factors and challenges

Innovation in hospitality has attracted considerable interest, partly because its processes and activities are so diverse, and partly because its impact on performance is still a puzzle. This study proposes a comprehensive theoretical model that reviews combinations of technological and non-technological innovation and the interrelation between different innovation strategies that contribute to generating competitive advantages. Using data from 2010 and 2012 CIS, it empirically examines different innovation strategies, analyzes their role in organizational performance, and thoroughly researches sectoral variation in innovation strategies between hospitality and other service subsectors. Comparative analysis suggests that hospitality is the least innovative service activity. The findings also show that in hotels sales turnover is positively related only to complex innovation strategies that emphasize both technological and non-technological innovation. The study concludes that the level of innovation varies from sector to sector and that innovation strategies can have different effects on performance depending on the sector.     

EPU and financial performance in the hospitality and tourism industry: Moderating effect of CSR,institutional ownership and cash holding

The purpose of this study is to examine the effect of policy-related economic uncertainty (EPU) on the financial performance of hospitality and tourism companies. More precisely, the study aims at revealing how the performance of hospitality and tourism companies is affected at times of increasing EPU, and the role of corporate social responsibility (CSR) engagement, institutional ownership and cash holding to moderate this proposed relationship. The study’s sample includes a total of 113 companies from the hotel, restaurant and airline industries for the period 2001-2018. Hypotheses are tested via two-way fixed-effect regression. The study finds that increasing EPU is detrimental to firm performance presented in declining Tobin’s Q. However, the magnitude of this negative effect on firm performance becomes less pronounced as firms engage more in CSR, have larger fraction of institutional ownership and hold larger cash and cash equivalents     

Energy conservation in large-sized hotels: Insights from a developing country

Tourism can drive positive, transformative changes in modern societies, but also becomes a source of significant environmental externalities. This is often the case for developing economies where the problem is exacerbated by immature national sustainability agendas. Targeted research, accounting for the local context, is necessary to enable transition of developing countries towards more sustainable patterns of tourism development. This study targets the hotel sector in Iran, one of the most energy inefficient hotel sectors around the world, to explore its pathway towards environmental sustainability. The dominance of domestic ownership and control and the prevalence of international economic sanctions are the distinctive features of the Iranian hotel sector. The study pinpoints reconfigurations in technology, knowledge, legislation and behavioural norms as the determinants of the sector’s environmental sustainability quest. Domestic hospitality companies should champion transformative pro-environmental changes in the Iranian hotel sector until international economic sanctions are lifted.     

A theoretical link between corporate giving and hospitality firm performance

This study makes a unique contribution to the hospitality literature by offering a theoretical model of the link between corporate giving (CG) and hospitality firm performance based on a duopolistic competition model with rational profit-maximizing hospitality firms. The equilibrium outcomes of the proposed model explicitly explain the mixed findings of the relationship between CG and hospitality firm performance found in the previous empirical studies. Specifically, the optimal level of a hospitality firm’s CG is positively related to the total market demand and the competitive advantage of CG, and negatively related to the induced cost of giving practices. Moreover, a positive or neutral relationship between CG and hospitality firm performance depends on whether CG could induce a competitive advantage of brand differentiation and customer loyalty to increase profit.     

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.     

Effect of consumer sentiment on hospitality expenditures and stock returns

Given the importance of consumers to the U.S. economy and especially to the hospitality industry, we explore how consumer sentiment (i.e. confidence in the economy) affects consumption expenditures and stock returns in the hospitality industry.We find that not only does consumer sentiment partly predict changes in future consumption expenditures, but changes in consumer sentiment are contemporaneously related to hospitality industry stock returns. More importantly, our results indicate that changes in consumer sentiment can partly predict changes in stock prices of hospitality firms, an indicator of firm performance. The predictive ability of consumer sentiment can thus be useful to managers in business forecasting, planning, and strategizing for profit maximization.     

Strategic responses of the Spanish hospitality sector to the financial crisis

The 2008 financial crisis weakened the hospitality sector severely, like other industries. This paper investigates the response of the Spanish hospitality sector to the crisis by analyzing a sample of almost 70% of Madrid hotels. In particular, this research focuses on the connection between the impacts of the crisis, the measures taken to alleviate the crisis and an individual hotel's performance. The study shows that hotels that focus on high quality, brand image and a loyal customer base are best equipped to handle the crisis. Increased spending on marketing also eases the impact of the crisis. Cost-cutting measures characterize the worst performers. Contrary to the results presented in the literature, the crisis had no immediately visible negative impact upon an individual hotel's performance. Therefore, hotels should focus on quality, branding, a reliance on loyal customers and increasing marketing to counteract the crisis.     

A meta-analytic review of antecedents of hospitality and tourism firms’ performance: A cross-cultural comparison

Despite the magnitude of scholarly understanding of firm performance, there has been no robust statistical meta-analytic review of antecedents of firm performance in hospitality and tourism journals. Therefore, this study conducted Hunter-Schmidt random-effects meta-analyses on the relationships between firm performance and its predictors based on Kaplan and Norton's balanced scorecard framework. This study identified fourteen antecedents of firm performance, and all proposed relationships were significant. This study also examined the moderating role of culture on the relationships at continental- and national-approaches by adopting sample z-tests and meta-regression. This study found the moderating role of culture on seven relationships at the continental-level comparison and identified corresponding cultural dimensions responsible for the degree of the relationships. This study expanded the literature on firm performance and contributed to strategic and financial management literature. Based on findings, the authors presented several important practical implications.     

Innovation,entrepreneurship, and restaurant performance: A higher-order structural model

Drawing on theories from hospitality, innovation, and entrepreneurship, this study examines a higher-order structural model investigating business innovation, the owners' entrepreneurial self-efficacy (ESE), and human capital as drivers of restaurant performance. The theoretically derived model was tested on data from 198 café and restaurant owners in Australia. The PLS-SEM analysis found restaurant innovation activities and the owner's ESE to positively influence restaurant performance. Furthermore, the six ESE dimensions had varying effects on restaurant performance, with ‘Developing new product and market opportunities’ having the strongest effect. In contrast, the entrepreneur's ‘human capital’, representing their levels of business ownership experience and entrepreneurship/industry education, did not significantly affect restaurant performance. However, human capital indirectly affected performance through innovation and ESE. The findings of this study advance theories in restaurant entrepreneurship and performance and present important implications for industry authorities to develop a successful and sustainable restaurant sector.     

Psychosocial work environment,work engagement,and employee commitment: A moderated,mediation model

This paper contributes to the growing body of literature on the wellbeing of hospitality employees from a perspective of strategic human resource management. The role of high performance work systems (HPWS) in enhancing the affective commitment of hospitality employees is examined. The study found work engagement to mediate the relationships between HPWS, perceived organizational support, and affective commitment. Workplace bullying, a highly prevalent phenomenon in the hospitality sector, was found to mediate the relationship between HPWS and affective commitment, while psychosocial safety climate moderated this mediating impact. We will suggest the implications for managing psychosocial work hazards in hospitality organizations.