Firm growth patterns: Examining the associations with firm size and internationalization

Understanding the growth patterns of an industry is essential for establishing sustainable growth strategies. However, until recently little had been known about restaurant firm growth patterns. Thus, this study examined the growth patterns of restaurant firms in association with firm size class and internationalization, after controlling for total and long-term debt leverage, retained earnings, and growth opportunity. Overall, the results of this study showed that small restaurant firms grow faster than large restaurant firms but the growth rate decreases as firm size increases. Furthermore, the growth rate of large firms decreased more slowly than small firms. In terms of internationalization, this study found that as firm size increases, the growth rate of small international firms decreases more rapidly than that of small domestic firms. However, the growth rate of large international firms decreases more slowly than that of large domestic firms. These findings indicate the appropriateness of internationalization strategies for large restaurant firms but the inappropriateness of these strategies for small firms. More detailed results and discussion are also provided.     

The effect of increasing employee compensation on firm performance: Evidence from the restaurant industry

This study examined the effect of employee compensation on restaurant performance from both short-term and long-term perspectives. The results of this study showed that increasing employee compensation immediately enhances (decreases) restaurant revenue growth (profitability) but decreases (improves) restaurant revenue growth (profitability) after one year. The results suggested that restaurant firms can utilize employee compensation as a management tool to enhance performance in terms of both short-term revenue growth and long-term profitability gains. The results further implied that restaurant firms could consider making small but continuous increases in employee compensation to maintain higher performance outcomes. However, such increases should be implemented with appropriate initiatives to reduce shirking behaviors by overpaid employees.     

The impact of material and immaterial sustainability on firm performance: The moderating role of franchising strategy

CSR and sustainability engagement is growing rapidly with ever-increasing attention. Accordingly, restaurant stakeholders now demand restaurant companies to disclose relevant ESG information (i.e., materiality) to analyze risks and opportunities that ESG factors bring to firms over the long term. As established in stakeholder theory, restaurant materiality is shaped by a firm's key stakeholders and also by the industry's distinguishing factor, franchising. However, despite their importance and timeliness, materiality and franchising remain largely absent from scholarly discussion in the field of tourism and hospitality. Using a novel industry-specific materiality classification of sustainability initiatives, here we show that franchising positively moderates the impact of investing in immaterial sustainability on firm performance. The results provide early empirical validation of stakeholder theory in relation to restaurant materiality and franchising, and show the impact of allocating a firm's resources to material and immaterial sustainability issues on firm performance in the restaurant context.     

Sustainability implementation in restaurants: A comprehensive model of drivers,barriers, and competitiveness-mediated effects on firm performance

This study examines sustainability implementation in restaurants by theorizing and testing a comprehensive model of antecedents and effects. It represents positive and negative pressures toward sustainability respectively by entrepreneurs’ attitude and barriers to sustainability, while hypothesizing that customer satisfaction and competitiveness mediate effects of these practices on firm performance. Covariance-based structural equation modeling is used to analyze survey data on 334 restaurants in North Italy. Results show that sustainability attitude exerts pressure toward sustainability, while barriers in terms of costs, fear of regulation or skepticism about benefits have negative, but lower, effects. Sustainability implementation positively contributes to firm performance, but only via two intermediate measures of business success: competitiveness and customer satisfaction. The study fills a gap in the literature by presenting a whole construct of sustainability, by testing two mediating effects not yet hypothesized and by highlighting in the same model the role of factors enabling and deterring sustainability.     

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.     

Product diversification and property performance in the urban lodging market: The relationship and its moderators

In this study, we investigate the relationship between product diversification and hotel property performance as well as the moderators of this relationship in the urban lodging market. Using stochastic frontier analysis with panel data, we calibrate the efficiency scores of 377 urban hotels in Beijing from 1994 to 2005. We then investigate the impact of product diversification on performance as measured by efficiency score. Results from panel data models indicate that the degree of product diversification exhibits a positive relationship with hotel performance. Hotel location, diversification expansion rate, and foreign ownership/operation are found to be significant moderating factors determining the effect of product diversification. Specifically, hotels that (a) are located farther from the city center, (b) expand diversification more slowly, and (c) are domestically owned are more likely to leverage the benefits stemming from product diversification. We provide a series of practical evaluation modules to help hoteliers improve performance.     

Revisiting the financing behavior of restaurant firms: The firm-size perspective

In International Journal of Hospitality Management, Jang and Ryu [Jang, S., Ryu, K., 2006. Cross-balance sheet interdependencies of restaurant firms: a canonical correlation analysis. International Journal of Hospitality Management 25 (1), 159–166] published a research article about the financing behavior of restaurant firms, using a canonical correlation analysis. Even though the study presents a general picture of financing in restaurant firms, the financing behaviors of firms of different sizes may differ because they often face different financing environments. Thus, this study re-examines restaurant firms and compares the results with Jang and Ryu [Jang, S., Ryu, K., 2006. Cross-balance sheet interdependencies of restaurant firms: a canonical correlation analysis. International Journal of Hospitality Management 25 (1), 159–166] to further enhance the understanding of the financing behaviors. The results show that, despite the differences in firm sizes, overall financing behaviors are similar to those reported by Jang and Ryu [Jang, S., Ryu, K., 2006. Cross-balance sheet interdependencies of restaurant firms: a canonical correlation analysis. International Journal of Hospitality Management 25 (1), 159–166], although they also suggest that restaurant firms of different sizes do indeed exhibit some different cross-balance sheet interdependencies including relatively more reliance on accounts payable among small and medium firms and more use of long-term debts among large firms. Moreover, long-term assets related to stockholder equity more among large firms but related to supplier credit more among small and medium firms.     

The influence of board interlocks on firm performance: In the context of geographic diversification in the restaurant industry

Given the strategic importance of resources and service that interlocking directors bring to a firm, this study aims to examine the influence of board interlocks on financial performance in the restaurant industry based on the resource dependence theory. Further, as the primary purpose, this study incorporates geographic diversification as a pivotal contingent factor, playing a moderating role on the board interlocks-firm performance relationship. This study found not only a positive main effect of board interlocks on financial performance, but also a positive moderating effect of geographic diversification on the relationship between board interlocks and firm performance. These findings contribute to the corporate governance literature by providing a unique dimension that geographic diversification is a salient factor adjusting the effect of board interlocks on firm performance in the restaurant industry. The results further offer implications for managers and shareholders of restaurant firms when electing directors as representatives of shareholders.     

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.     

Restaurant purchasing skills and the impacts upon strategic purchasing and performance: The roles of supplier integration

This study was designed to 1) identify essential purchasing skills for restaurant management; 2) investigate how specific purchasing skills impact a more strategic approach to purchasing affecting restaurant performance; 3) examine if supplier integration directly affects restaurant strategic purchasing; 4) investigate if supplier integration moderates the effects of purchasing skills upon restaurant purchasing. Results demonstrated that interpersonal skills and managerial skills had significant and positive effects upon strategic purchasing, but not technical knowledge. In particular, managerial skills were a more significant contributor to the development of strategic purchasing than were interpersonal skills. Results also supported the significant and positive effect of strategic purchasing upon restaurant performance. The relationship between purchasing skills and strategic purchasing were found to be significantly different between those having higher supplier integration, technical skills and process skills when compared to those having lower scores in these areas. Theoretical and managerial implications are provided.     

Hospitality innovation strategies: Robustness analysis of paths to firm performance

Empirical knowledge on the relationship between innovation and firm performance in the hospitality industry is important for theoretical progress and for decision making. Martin-Rios and Ciobanu’s (2019) recent contribution identifies eight different innovation strategies being significantly associated with firm performance including the ambitious strategy of simultaneously innovating products, processes, organizations, and marketing. By replicating the analysis and testing the robustness of the results with a specification curve analysis using the same dataset, we find only three strategies to be robustly associated with firm performance. All three include process innovation as a necessary component: i) a pure backstage-oriented strategy of process and organizational innovation that can be ii) extended with product innovation and iii) a frontstage-oriented strategy, where marketing innovations complement new products and processes. This substantiates the relevance of the process-based view of innovation in services and call for efforts in theorizing about how different configurations of innovation strategies can represent paths to firm performance.     

Farming and tourism enterprise: Experiential authenticity in the diversification of independent small-scale family farming

This article examines the business choices made by independent farming families, when confronting the need to diversify away from traditional agricultural activities by starting farm-based tourism businesses. Based on interviews with farm family members who have set up tourism attractions on their farms, and drawing upon the concept of experiential authenticity, the article explores their self-conceptions of their family identities. In so doing, it addresses the choices and dilemmas facing farm families who attempt diversification through the tourism attraction route, and considers how this affects their attitudes towards more traditional farming activities. Using qualitative case study data, an empirically grounded framework is proposed that expresses the choices and challenges facing tourism entrepreneurial family farm members in the UK, through the conceptual lens of experiential authenticity.     

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.     

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.     

The effects of consumer experience and disconfirmation on the timing of online review: Field evidence from the restaurant business

This study investigated the effects of consumer experience and disconfirmation on the timing of online reviews. Based on a unique dataset of restaurant reservations and online reviews, the empirical results indicate that (1) there is a reverse U-shaped relationship between consumer experience and online review posting timing, i.e., consumers who have strongly dissatisfying or satisfying experiences tend to post online reviews earlier than consumers who have moderate experience; (2) the disconfirmation between a customer’s experience and the average rating of prior reviews has a negative effect on his or her online review posting speed; and (3) the effect of disconfirmation on review posting speed is substantial for consumers who have strongly dissatisfying or satisfying experiences, while it is weaker for consumers who have moderate experience.     

Levels of quality and environmental management in the hotel industry: Their joint influence on firm performance

Many studies have examined quality management and environmental management separately. This paper analysed the commitment to quality and environmental management at the same time, and their separate and joint effects on hotel performance. The empirical data were collected from a sample of 301 3-to-5-star Spanish hotels. A cluster analysis was carried out to identify the levels of commitment to quality and the environment. Then, ANOVA and regression analysis tested the quality and environmental commitment levels-performance link. Three levels of quality and environmental commitment have been identified. The findings showed that the commitment to quality and environmental practices influences hotel performance.     

The impact of e-word-of-mouth on the online popularity of restaurants: A comparison of consumer reviews and editor reviews

With the growing availability and popularity of web-based opinion platforms, online product reviews are now an emerging market phenomenon that is playing an increasingly important role in consumer purchase decisions. Generally speaking, there are two types of online reviews: consumer-generated reviews that are based on personal experiences, and reviews that are written by professional editors. However, little prior research efforts have been devoted to evaluate whether these two types of reviews have different influences on the behavior of online users. This study shows that consumer-generated ratings about the quality of food, environment and service of restaurants, and the volume of online consumer reviews are positively associated with the online popularity of restaurants; whereas editor reviews have a negative relationship with consumers’ intention to visit a restaurant's webpage. The findings will help hospitality researchers and practitioners better understand the impact of electronic word-of-mouth on purchase decisions.     

Estimating the impact of entertainment on the restaurant revenues of a Las Vegas hotel casino: An exploratory study

Considering the growing presence of non-gaming amenities in a mature casino market such as the Las Vegas Strip, this study examined the indirect contribution of showroom entertainment to casino-operated restaurant business volumes. Using the internal data of a Las Vegas hotel casino, this research found a statistically significant and positive relationship between daily showroom headcounts and food and beverage revenues. For each additional show attendee, daily food and beverage revenue increased $6.96. This finding suggests that casino executives should consider leveraging show traffic with additional revenue-enhancing venues such as restaurants.     

Understanding and projecting the restaurantscape: The influence of neighborhood sociodemographic characteristics on restaurant location

To better understand the location patterns of different types of restaurants across the United States, we investigate the relationship between neighborhood sociodemographic characteristics and restaurant location using a unique data set from 2013 covering 30,772 U.S. zip codes. The estimation results from negative binomial regression models confirm the significant impacts of various sociodemographic factors (e.g., population density, median age, median household income, average household size, educational attainment, gender distribution, housing tenure, neighborhood urbanization) on restaurant location. We also project future restaurant growth potential based on model estimates and projected changes in sociodemographic characteristics by 2020. The results are analyzed, and several metropolitan areas in Texas and Florida are identified as having high potential for growth. Lastly, implications are provided for restaurant real estate practitioners.     

A conceptual framework of the service delivery system design for hospitality firms in the (post-)viral world: The role of service robots

This study aims to develop a conceptual framework of the service delivery system design for hospitality firms in the (post-)viral world. Several theoretical approaches such as resource-based view, value chain analysis, stakeholder theory, PESTEL analysis, positioning strategy, and service delivery system design were adopted. The paper identified three service delivery system designs (robotic, human-based, and mixed) and analyses their requirements, advantages, disadvantages, and potential target markets. According to the suggested model, hospitality firms need first to explore the expectations of tourists. Then comes the analysis phase (based on a holistic perspective, and consisting of RBV, Value chain, Stakeholder, and PESTEL analyses), which helps hospitality firms to identify how they should differentiate and position themselves in the market. Following, companies decide on what kind of service delivery system they should offer to their target customers, and position themselves in the market according to the chosen system.