An investigation of AAA diamond rating changes on hotel performance |
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| Institution: | 1. Rosen College of Hospitality Management, University of Central Florida, 9907 Universal Blvd., Orlando, FL, 32819, United States;2. Rosen College of Hospitality Management, University of Central Florida, Orlando, FL, United States;1. Department of Apparel, Events, and Hospitality Management, Iowa State University, Room 1084C, LeBaron Hall, 2302 Osborn Drive, Ames, IA 50011-1078, USA;2. School of Hospitality and Tourism Management, Purdue University, Room 245, Marriott Hall, 900 W. State Street, West Lafayette, IN 47907-2115, USA;1. Department of Business and Accounting, Faculty of Economics and Business Administration, Universidad Nacional de Educación a Distancia (UNED), Paseo Senda del Rey, 11, 28040 Madrid, Spain;2. Department of Business and Accounting, Faculty of Economics and Business Administration. Universidad Nacional de Educación a Distancia (UNED), Paseo Senda del Rey, 11, 28040 Madrid, Spain;1. School of Marketing, Ehrenberg-Bass Institute for Marketing Science, University of South Australia, Adelaide, Australia;2. Department of Agricultural Economics, Stellenbosch University, Stellenbosch, South Africa;1. Department of Tourism, Hospitality & Events, University of Sunderland, UK;2. Sir Tom Cowie Campus, St. Peter’s Way, SR6 0DD, Sunderland, UK;1. University of Central Florida, 9907 University Blvd., Orlando, FL 32819, USA;2. Purdue University, School of Hospitality and Tourism Management, 900 W. State St., West Lafayette, IN 47907, USA;3. Purdue University, School of Hospitality and Tourism Management, 900 W. State St., West Lafayette, IN 47907, USA;1. University of Arkansas, 2650 N. Young Ave., Fayetteville, AR 72704, United States;2. Niagara University, 403 St. Vincent''s Hall, Niagara University, NY 14109, United States |
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| Abstract: | Despite previous attempts to link hotel rating systems to performance, no prior study has examined the effects of changes in Diamond ratings. Considering the variability in Diamond ratings, and the fact that hotels may gain or lose a Diamond over time, it is important for hotel properties to assess such outcomes on key performance indicators (KPIs). Hence, this study examines the influence of Diamond rating changes on hotels’ KPIs (i.e., occupancy rate, average daily rate, and revenue per available room) and competitive set indexes, which allow to benchmark a property’s performance against a designated competitive set. Results suggest that in both the short and long-terms, significant differences in KPIs and indexes exist between properties which benefited from an increase in Diamond rating, versus those which suffered from a drop in Diamond rating. Furthermore, despite such improved performances over time, improvements in hotels’ KPIs and indexes tended to diminish over time. The current findings yield important contributions to the literature regarding the effects of hotel rating changes on KPIs and indexes and provide valuable insights to hotel owners and operators. |
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| Keywords: | Hotels Diamond rating Key performance indicators Competitive set indexes American Automobile Association |
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