The Non-Equity Entry Mode Choices of International Hotel Organizations in New Zealand

ABSTRACT

Research on the non-equity entry mode choices of service firms is relatively limited. We use transaction cost economics and organizational capability perspectives to examine the determinants of choosing between franchising and management contracts in the hotel industry. In our analysis of four international hotel organizations operating in New Zealand, we found that both asset specificity and imperfect imitability helped in explaining the choice between franchising and management contracts. Behavioral uncertainty and host country management capabilities explained the entry mode choice of some hotel organizations but were not applicable for others that entered New Zealand via international strategic alliances or used strata titles. Finally, environmental uncertainty and the development of New Zealand’s business environment had a limited effect on choosing between franchising and management contracts.     

How is the hospitality and tourism industry different? An empirical test of some structural characteristics

Structural characteristics, such as competition, risk, leverage and capital intensity, directly impact the strategic management of firms operating within an industry. We provide an empirical test and formally compare the structural characteristics of the hospitality and tourism (HT) industry with other industries. Our results, based on a sample of firms from the S&P 1500 index over 21 years, show that the HT industry has higher leverage, higher risk, higher capital intensity and higher competitive rivalry than other industries in the U.S. economy. The formal identification and recognition of these differences provides justification for using the HT industry as a context for testing business theories, and can explain differences in decision-making and firm outcomes such as financial and social performance, as well as efficiency, growth, and survival of HT firms.     

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.     

Exploring home-based accommodation operators' responses to Covid-19: Implications of untact hospitality adoption

Unlike the mainstream research conducted on the COVID-19 pandemic and its impacts on both large-scale tourism and hospitality firms, and also at the destination level, the current study focused on home-based accommodations in Iran which have experienced rapid development throughout the country. In-depth interviews with a number (n = 45) of such accommodation operators revealed that due to their perceived high vulnerability to the pandemic and self-protection, they adopted “untact hospitality”, thereby decreasing their direct interaction with guests. Looking through the lens of Protection Motivation Theory, four main themes were explored: motivations to work in the hospitality industry; local accommodation operators' perception of threat; coping appraisal; and protection behavior intention. The results revealed that many local ventures were unable to survive, leading to the bankruptcy of such units throughout the country. With few exceptions, the public sector's responses to the pandemic, and the hospitality sector's measures, were generally unsuccessful in managing the health crisis. The current study contributes to the risk, crisis preparation and crisis management of hospitality organizations at the local level in the context of their health protection motivation behavior.     

Environmental scanning, industry structure and strategy making: concepts and research in the hospitality industry

This paper presents a model for strategic analysis in the restaurant industry. A review of the evolution of environmental scanning and the concept of industry structure is offered. These concepts as well as the results of research into the environmental scanning behavior of hospitality firms are synthesized into a proposed model for corporate environmental scanning activities.     

Turnaround strategy: A study of restaurant firms

This paper uses a case study approach to analyze the turnaround actions of two restaurant firms and compares them to the model of Robbins and Pearce [1992. Strategic Management Journal 9, 287–309]. The objective of this study is to scrutinize why these firms were unsuccessful in turning around and identify gaps between the firms’ actions and the empirical model of turnaround proposed by Robbins and Pearce. Two key turnaround measures, i.e., retrenchment and recovery are explored in detail and discussed in the context of the firms. The need for studying turnaround strategies is warranted as the number of hospitality firms that perish because of unsuccessful turnaround strategies is on the increase. Since turnaround strategies have not been pursued vigorously as a stream of research within the hospitality industry context, this approach would provide a framework for hospitality researchers to initiate similar future research efforts, which in turn would help the industry cope with turnaround.     

The moderating role of brand diversification on the relationship between geographic diversification and firm performance in the US lodging industry

In spite of the prevalence and strategic importance of diversification for US lodging firms, research on the effects of diversification has been insufficient in the hospitality literature. Especially, an examination of the moderating effect of brand diversification on the relationship between geographic diversification and performance of US lodging firms has been lacking in the literature in various disciplines, including hospitality field thus far. This study aims to first investigate the individual effect from each of brand and geographic diversification strategy on firm performance in the US lodging industry. Further, to investigate effects of diversification comprehensively, this study examines the moderating effect of brand diversification on the relationship between geographic diversification and performance of US lodging firms. The study's results indicate a positive and significant effect of geographic diversification on firm performance, an insignificant effect of brand diversification, and a positive and significant moderating effect of brand diversification in the US lodging industry.     

国外接待业人力资源管理研究评述

经过20世纪80年代以来20多年的学术研究和实践,国外接待业人力资源管理已成为一个较成熟的研究领域.本文分战略性人力资源、招聘和选拔、流动、培训和开发、薪酬管理、绩效评估、工作设计与参与和管理者开发等8个主要研究议题,对国外接待业人力资源研究进展进行了较系统的评述.目前综述国外接待业人力资源研究进展的文献尚不多见,国内接待业人力资源研究尚不全面和深入,本文综述将为国内相关研究提供有益借鉴.     

The effect of environment risk,corporate strategy,and capital structure on firm performance: An empirical investigation of restaurant firms

The co-alignment process has been used in hospitality strategy as a framework to explain strategic orientation of firms. In this study, using a sample from the US restaurant industry, the authors test the simultaneous impact of surrogates from constructs identified as part of the co-alignment model, i.e. environment, strategy, and structure, on firm performance. Results indicate that a significant variance in firm performance is explained by the variables from the foregoing constructs of the co-alignment model. The robustness of this study provides restaurant firms’ managers a basis to evaluate their firms’ strategic orientation vis-à-vis its impact on firm performance.     

Globalisation,airline alliances and tourism: A strategic perspective

The forces driving globalisation have impelled the majority of international airlines to enter into strategic alliance arrangements. Strategic alliances have enabled airlines to work around structural problems of the industry, particularly foreign ownership restrictions, national regulatory constraints and constraints on building up networks. The history of alliances, to date, shows them to be changing and unstable. Alliances will probably continue to be a feature of the international airline industry, but the forms and membership of alliances may well change further in the future. Further deregulation and liberalisation of the industry could mean that alliances become less important in the future, if deregulation allows mergers and acquisitions of airlines across national borders. Two scenarios of possible futures are presented, with an assessment of their impacts on tourism, as an aid to strategic analysis.     

An importance–performance analysis of sustainability factors for long-term strategy planning in Slovenian hotels

This paper explores the potential role of economic, environmental and social reporting in long-term strategy planning in the hospitality industry. The context of study is Slovenia. Following the development of a set of “sustainability” indicators, hospitality managers were asked to rate the importance of each indicator to sustainable operations and the performance of their firms in implementing management actions. Seven hotel performance factors were established across the triple bottom line. Using importance–performance analysis (IPA), key issues are identified as requiring the attention of stakeholders to support the sustainable development of Slovenia's hospitality industry. For managers, the 10 most important indicators include those related to economic performance, customer relationship and cost saving environmental activities: performance here, and in marketing, was perceived as poor. In contrast, actions taken to increase environmental awareness, and improve relationships with employees are seen by managers as less important, and even as possible overkills. Community relationships are seen as of low importance and where the industry performs relatively poorly. A major recommendation is that Slovenian hotel managers should focus on improving their economic performance: neglecting this could threaten hotels’ long-term survival. IPA analysis is shown as applicable to strategy making for sustainable development in hospitality industry contexts worldwide.     

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.     

Financial features of dividend-paying firms in the hospitality industry: A logistic regression analysis

The purpose of this study was to identify the financial features that distinguish dividend-paying firms from non-dividend-paying companies in the U.S. hospitality industry. The logistic regression model shows that firm size and profitability are significant drivers of dividend payout, whereas investment opportunities deter dividend payout. In the U.S. hospitality industry, larger hospitality firms with higher profitability but fewer investment opportunities are more likely to pay out dividends to their shareholders.     

Mission statements of international airlines: a content analysis

A well-designed mission statement is essential for formulating, implementing, and evaluating business strategy. Yet the role of the mission statement in the strategic management of business firms has not been sufficiently highlighted in the research literature. It is not surprising that minimal attention has been paid to the role of mission statements in the strategic management of tourism and hospitality organisations. This paper attempts to remedy this apparent neglect. It focuses on the international airline industry by selecting 50 mission statements from corporate websites.¹ The mission statements are then analysed to determine the extent to which they conform to commonly accepted views of the ‘ideal’ mission statement. Variations from the stated ‘ideal’ are highlighted and discussed. Conclusions are drawn regarding the role of mission statements in the strategic management of tourism and hospitality organisations.     

Decision modeling using simulation: a hospitality perspective

This article reviews the use and role of simulation as a decision-modeling technique in the hospitality industry. While simulation modeling currently appears to be used primarily by academic institutions and large hospitality firms, new advances in computer hardware and software should mean it will see much greater use in the future as a management decision technique for smaller hospitality operations. The article outlines a systematic six-step process for constructing and evaluating such simulation models and provides an example of the use of this process for modeling a small food-service operation.     

Towards An Experience Innovation Canvas: A Framework for Measuring Innovation in the Hospitality and Tourism Industry

ABSTRACT

As organizations transition from a service to experience economy, they will need to reimagine their business performance “scorecards” to reflect practices that place the co-created guest experience at the heart of their innovation efforts. This article synthesizes innovation and experience economy literature to depict six theory-based propositions and a framework for measuring innovation in the hospitality and tourism industry. The propositions were investigated in 19 experience firms comprising lodging, dining, attractions, and events in Southern California. Data from executive interviews (n = 19) and follow up manager surveys (n = 202) showed strong support for front of the house innovation focused on guest offerings to enhance interactions, personalization and social spaces and back of the house innovation focused on connecting employees with the firm’s core purpose. Measures of memorable triggers and motivators of emotional value represent promising new frontiers. By identifying the current practices and measures of senior managers faced with leading innovation in their own business units, this study both informs this practice and presents a unique and updated perspective on experience innovation.     

Going beyond the curve: Strategic measures to recover hotel activity in times of COVID-19

Hospitality firms are facing unprecedented challenges on a global scale. The catastrophic effects of the COVID-19 pandemic and its multiple devastating global consequences have initiated a profoundly disruptive transformation in the hospitality sector, as firms attempt to adapt their activity to the current uncertain scenario. This study draws on the crisis management literature to identify the key drivers of hotel recovery in the event of a disaster or an external crisis, like current pandemic. A sample of 237 Spanish hotel managers evaluated and ranked the strategic measures. Based on this evidence, measures were statistically examined to identify which ranked as most significant in helping hospitality managers. The results yield valuable theoretical and practical insights to guide hospitality managers towards business adaptation and recovery by highlighting key strategic measures for implementation in the short term.     

COVID-19 and the future of work in the hospitality industry

The COVID-19 pandemic has significantly disrupted the hospitality industry. This research combines different data to examine the US labor market trends during COVID-19. It is found that low-preparation jobs in leisure and hospitality are the hardest hit and slow to recover. The pandemic has highlighted growing issues in workplace safety, skill gaps, technology adoption, and work reorganization in the hospitality industry. This paper develops two propositions about preparing hospitality workers for the future of work and providing flexible work arrangements.     

Managing supply chain relationships in the hospitality services: An empirical study of hotels and restaurants

Limited research examines the effects of interorganizational trust and interdependence on the relationship quality between supply chain partners in the hospitality services. It is also not well understood how the interorganizational joint team manages the relationships between hospitality firms and their suppliers. Drawing on the social exchange theory and the resource dependence theory, we propose a model and hypotheses to articulate the mediation effect of joint teamwork on the relationships between interorganizational trust, interdependence, and relationship quality. We rigorously analyze survey data from hotel and restaurant procurement managers. Our findings confirm that interorganizational trust and interdependence have significant effects on joint teamwork. Meanwhile, the teamwork mediates the effects of interorganizational trust and interdependence on relationship quality. Our work enriches the understanding of supply chain relationships in the hospitality services, and provides meaningful insights for the hospitality firms to manage supply chains. Finally, we conclude our work with suggestions for future research.     

The role of business model innovation in the hospitality industry during the COVID-19 crisis

The hospitality industry worldwide is among the hardest-hit industries from the COVID-19 lockdowns. Initial theoretical and practical observations in the hospitality industry indicate that business model innovation (BMI) might be a solution to recover from and successfully cope with the COVID-19 crisis. Interestingly, some firms in the hospitality industry already started to successfully adapt their business models. This study explores the why and how of these successful recovery attempts through BMI by conducting a multiple case study of six hospitality firms in Austria. We rely on interview data from managers together with one of their main stammgasts for each case, which we triangulate with secondary data for the analysis. Findings show that BMI is applied during and after the crisis to create new revenue streams and secure a higher level of liquidity, with an important role of stammgasts.