Hotel property performance: The role of strategic management accounting

In the current study, we contend that to enhance their competitiveness and performance, hotel properties need to develop and implement internal policies and procedures such as strategic management accounting that are consistent with their business strategies and account for changing competitive demands. We employ a sample composed of 80 hotel properties to investigate the key precursor of hotel property strategic management accounting use and its impact on hotel property customer and financial performance. The results highlight that market orientation business strategy is a key determinant of hotel property strategic management accounting use and illuminate the mediating influence of hotel property strategic management accounting use and hotel property customer performance on the relationship between hotel property market orientation business strategy use and hotel property financial performance. Recommendations are provided for both researchers and hotel managers concerning their future study of, or use of, strategic management accounting.     

A Causal Relationship Between the Balanced Scorecard Perspectives

Abstract

An increasing number of hotel organizations endeavor to achieve long-term competitive advantages in the marketplace through the implementation of strategic performance measurement systems. These systems are designed to integrate and monitor strategic objectives throughout the business processes. This paper investigates the causal relationships between the strategic performance measures of hotel organizations, using The Balanced Scorecard (BSC) framework. This comparative study illustrates how hotel organizations plan, improve and monitor their strategic performance targets through the use of comprehensive performance measurement systems. The paper also recommends specific approaches for the implementation of the BSC for hotel organizations.     

The Marketing Planning Index: A Tool for Measuring Strategic Marketing Effectiveness

Abstract

Managers practice in a consistently changing environment necessitating the need for an effective strategic marketing process. Nevertheless, measurement of marketing effectiveness has tended to be ignored in the literature. This study proposes a new managerial tool called the marketing planning index, which measures the effectiveness of marketing. The tool is tested on the service industry-in this case the hotel sector. Our findings indicate that the marketing planning index is a simple but powerful managerial tool that helps develop the diagnostic information needed to generate corporate and business level initiatives designed to improve strategic marketing effectiveness.     

Strategic groups in the hospitality industry: Intergroup and intragroup performance differences in Alicante, Spain

The hotel sector is currently immersed in a very uncertain, highly competitive environment, due to which it needs information for the correct management of its establishments. This information can be obtained from the classification of hotels in strategic groups. The present empirical research presents strategic groups in the hospitality industry as a useful tool for the planning and implementation of strategies by hotels that helps to determine their competitive strategies and advantages. This research paper additionally shows how the levels of performance between the hotels belonging to each group can be evaluated from strategic groups. In this study, the tool is applied to the hotel sector of the Spanish province of Alicante, a very important geographical area in the context of international tourism. The dimensions resource commitment and tourist activity scope have been used to define the strategic groups.     

How managerial ties affect hotels’ proactive environmental practices in China: The contingent role of institutional environments

Despite the increasing attention of environmental management in the hotel industry, few studies have examined how managerial ties impact hotels’ adoption of proactive environmental practices (PEPs) in China. Drawing on institutional theory, this study develops a model that investigates the differential effects of political ties and business ties on PEPs in the presence of important institutional factors. Using a primary survey and multiple secondary datasets on 190 Chinese hotels, we find that political ties inhibit a hotel’s adoption of PEPs whereas business ties facilitate PEPs. Moreover, advanced legal development and high levels of regional pollution reduce the impacts of both political ties and business ties on PEPs. We also test the relationship between PEPs and hotels’ financial performance. These findings provide novel insights into how managerial ties shape a hotel’s strategic behaviors for environmental protection under the influence of institutional environments in emerging economies.     

Perceptual mapping of attributes and preferences: an empirical examination of hotel F&B products in Korea

A hotel's Food and Beverage (F&B) product is increasingly recognized as an essential component of strategic planning in the hotel business. However, despite the importance of hotel F&Bs, relatively little empirical research has been undertaken to determine major attributes of F&Bs and investigate customers' preferences for them. This study examines the attributes and customer preferences of hotel F&Bs for eleven super deluxe hotels in Korea. Factor analysis is first employed to identify the underlying dimensions of F&B attributes which determine how customers perceive F&B performance. A second technique, multidimensional scaling, is used to reveal customers' perceptions of how a given hotel's F&B differs from the competitors' and preferences of when that hotel's F&B is evaluated better than the others. A meaningful interpretation is delineated from the perceptual map of major F&B attributes and ideal points of customers. The findings suggest that for the ultimate success of F&B management a hotel's F&B manager must make the effective connection between the attributes of hotel F&B and ideal points perceived by customers in various dining-out situations.     

Enhancing business performance of hotels: The role of innovation and customer orientation

Innovation management and customer orientation have been widely recognized as key factors in enhancing the business performance of hotels. Our research investigates the interplay between customer orientation, innovation, and business performance in the Alpine hospitality industry. The study contributes to current innovation research by jointly investigating hotel innovativeness and innovation behavior as two distinct dimensions of the innovation concept. Analyzing data from 203 hotel managers, this study shows that the effect of hotels’ customer orientation exceeds the effects of innovativeness and innovation behavior on financial and non financial business performance. Mediation analysis shows that innovation behavior partially mediates the effect of customer orientation on business performance. The results of the study provide hotel management with relevant insights into the customer orientation innovation performance chain.     

Leadership Competencies for Hotel General Managers: The Differences in Age,Education, and Hotel Characteristics

This study was designed to explore the leadership competencies necessary for general managers (GM) in Thailand hotels. The exploratory factor analysis extracted six leadership competency components: leadership, motivational/interpersonal skills, strategic orientation, planning and implementation, team building and ethics, communication skills, flexibility, and concern for the community. The results showed that team building and ethics, leadership, and communication skills are the most important factors for the GMs. In contrast, flexibility and strategic orientation were the least important competencies for them. There were significant differences between leadership competency factors and GMs’ age, education, hotel stars, and hotel locations in diverse aspects.     

Purpose of stay and willingness to stay as dimensions to identify and evaluate hotel experiences

The market of experiences promises business opportunities to service-based sectors. However, company managers miss procedures for strategic decision-making. This paper presents a practical procedure to help managers to move into the experience business in the hospitality sector. Sector experts participated in a session identifying hotel possible uses. 290 clients evaluated the promotional brochure of 18 hotels stating their intention to stay and perception of hotel adequacy to the uses experts proposed. A PCA identified five stay purposes: couple, collective, business, elderly and soloing. A logistic regression analysis showed that couple and collective have the highest positive influence in staying intention whereas elderly and business have the most negative influence. Experiences elicited by hotels were assessed as belonging to a series of clusters defined by “will to stay” and stay purposes. Results allow managers to better understand consumer's experiences and to manage their offerings into the experience market.     

Effect of customer orientation and entrepreneurial orientation on innovativeness: Evidence from the hotel industry in Switzerland

While researchers have explored the relationship between customer orientation, entrepreneurship and innovativeness with business performance in different organizations, few such studies exist on the hotel industry. This current work investigates the potential influences of these variables on hotel industry performance. Data for this study was collected through personal questionnaires collected from 156 hotel managers and owners from German and French speaking cantons located in Switzerland in order to examine the interrelation between innovativeness, customer orientation, entrepreneurship and service business performance dimensions (i.e., profit goal achievement, sales goal achievement and ROI achievement). The findings support aspects of prior research, but also provide some new insights by exploring customer orientation and innovativeness simultaneously and revealing how these factors impact upon the performance of the Swiss hotel industry. In the light of existing literature, limitations and future research directions are subsequently addressed.     

The response of hotel performance to international tourism development and crisis events

This study uses panel regression tests to examine the response of hotel performance to international tourism development and crisis events in Taiwan. Hotel performance measures are revenue (revenue per available room and occupancy rate), profitability (return on assets and return on equity) and stock performance. The crises were the earthquake on September 21, 1999 (the 9/21 earthquake), the terrorist attacks of September 11, 2001 in the US (the 9/11 terrorist attacks) and the outbreak of Severe Acute Respiratory Syndrome on April 22, 2003 (the SARS outbreak). This study makes four major contributions. First, test results confirm that international tourism development (ITD), proxied by the growth of total inbound tourist arrivals, has a more direct influence on hotel sales and profitability than it does on hotel stock performance. Second, this study identifies that the absence of a strong tie between ITD and hotel stock returns that was found in previous studies is due to the time-varying discount rate caused by investors’ changing expectations for the prospect of future cash flows from holding hotel stocks. Third, this study finds new evidence that while the poor performance of hotel stocks caused by the 9/21 earthquake and the 9/11 terrorist attacks was attributed to the loss of hotel sales revenue, the adverse effect of the SARS outbreak on hotel stock returns is attributed not only to decreased hotel sales revenue but also to the increased discount rate. Lastly, this study is the first to investigate whether the response of hotel stock returns to ITD depends on the state of economy and concludes that the response of hotel stock performance to ITD in business cycle contraction is statistically different from that in business cycle expansion. Further, although the influence of ITD on hotel stock performance is still irrelevant during expansion periods, ITD can significantly enhance hotel stock returns during contraction periods.     

An analysis of the relationship between market orientation and business performance in the hotel industry

The purpose of this study was to conduct an investigation into the link between market orientation and business performance in the hotel industry. Data were generated from 63 hotels in Hong Kong. The findings indicated that market orientation is positively and significantly associated with the marketing performance and financial performance of a hotel. The implications of the findings are discussed and the limitations of the study as well as future research directions are addressed.     

Determinants affecting comprehensive property-level hotel performance: The moderating role of hotel type

It is crucial for hotel managers to understand the main drivers of each property's financial performance. This study examines the key antecedents of both service-profit chain frameworks (customer and employee satisfaction) and strategic perspectives (size, customer mix) that influence a comprehensive hotel performance. The findings of this study show that customer satisfaction is a prominent driver of performance and that hotel size and customer mix also have significant effects on performance. This study also examines the moderating effects of hotel type on the following three determinants: customer satisfaction, hotel size, and customer mix and performance. The findings will offer useful insights to hotel chain firms and hotel investors who manage or own a portfolio of different hotel types.     

Locational strategies of international hotel chains

An empirical study was undertaken into the expansion strategies of international hotel operators in five countries in Eastern Central Europe. A questionnaire survey was conducted of the leading chains, framed around an eclectic paradigm. The analysis was complemented with multivariate analysis of competitive and locational strengths, thereby permitting additional insights into the relative positions of the major companies. The major ownership advantages were knowledge of guest requirements, strategic planning, and reservation systems. Locational advantages identified consisted of the size and nature of the city in which the hotel was to be located, the infrastructure within the region, and the perception of the region as an attractive business destination.     

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.     

Facilitating Benchmarking with Strategic Grouping and Data Envelopment Analysis: The Case of International Tourist Hotels in Taiwan

For a performance measure to be instructional in future operations, selecting the right strategic groups of firms from which appropriate benchmark targets are to determined is important in the development of business strategies. The immediate question is how to group firms and choose the best benchmark. In this study, a revised context-dependent data envelopment analysis model is applied to identify multilevel strategic groups. Empirical data are obtained for 56 international tourist hotels in Taiwan. Five strategic groups are identified in terms of efficiency frontiers, and the hotels within the groups are ranked by attractiveness scores that reveal their competitiveness. The hotels are also assessed by progress scores that reveal the effort needed for them to advance to a higher level. By integrating both these scores, a clear benchmarking path is designed for each hotel. This path can guide inefficient hotels to identify suitable role models for excellence.     

Different from or similar to neighbors? An investigation of hotels' strategic distances

This paper examines how conformity and differentiation impacts hotel performance. It evaluates strategic outcomes of hotel entrepreneurs' choice of geographic location, capacity, and quality. Using instrumental variable (IV) estimation, we find that the distribution of similar competitors affects hotel performance and performance risk. Specifically, results show that choosing a similar capacity (conformity) to competitors may lead to higher and more stable performance. The results also reveal that locating geographically close to competitors or choosing a similar quality of product to competitors (both conformity strategies) can increase hotel performance but also increases performance risk. Additionally, when mixing conformity and differentiation strategies in terms of location, capacity, and quality selection, a higher dispersion of differentiation (i.e., highly differentiated in one product dimension while conforming to others in all remaining product dimensions) increases both performance and performance risk. Findings of this study can aid entrepreneurs in improving their strategic decisions and product positioning.     

The relationship between CRM, RM, and business performance: A study of the hotel industry in Taiwan

This study aims to investigate the implementation of customer relationship management (CRM) and its effect on relationship marketing (RM) and business performance, through an analysis of the hotel industry in Taiwan. A survey on hotels, including general and tourist hotels, and bed and breakfasts (B&Bs) was conducted, and a total of 560 questionnaires were returned. The results showed that implementing CRM has a significant and positive influence on the RM effect, positively affecting business performance for both hotels and B&Bs. However, a comparison of the influential paths of relationship models between hotels and B&Bs showed that, for hotels, the Internet service and customer support functions of the CRM strategy are the main sources of influence on the RM effect and business performance, whereas for B&Bs, the marketing support function of the CRM strategy alone influences the RM effect and business performance. To achieve higher performance, the different types of hotel enterprises should understand their main advantage before implementing key CRM strategies.     

Value Creation

Abstract

The most essential theory of loyalty marketing is that a small increase in loyal customers can bring a significant increase in profitability to a business. Recently, businesses in various industries have turned single-brand loyalty programs into corporate-wide loyalty programs across different brands. The purpose of the study was to examine the effect of strategic alliance on customer loyalty in the hotel industry. Results of the study indicate that there is a positive relationship between strategic alliance and customer loyalty, and that value-creation from strategic alliance is only one element in the decision-making process of loyal customers. Managerial implications, limitations, and recommendations for future research were discussed.     

The influence of the cultural dimension of uncertainty avoidance on business strategy development: A cross-national study of hotel managers

The purpose of this exploratory study was to empirically investigate the potential influence of uncertainty avoidance (UA) on hotel top managers’ approach to strategy development. Scales were developed to measure managers’ openness to strategic change, involvement of others, formality of strategic control, type of data used in strategic analysis, and strategic planning time horizon. Responses from 207 managers (50 Americans, 43 Malaysians, 70 Thai, and 44 Turkish) were analyzed using ANOVA. The findings indicated that UA had minimal influences on the managers’ approach, as different managers from cultures with varied degrees of UA demonstrated noticeable similarities among the five variables investigated. Practical implications as well as suggestions for future research were provided.