The economy,tourism growth and corporate performance in the Taiwanese hotel industry

This study investigates the impact of economy and tourism growth on the corporate performance of tourist hotels in Taiwan. The indicators of corporate performance under consideration are occupancy rate (OPR), return on assets (ROA), return on equity (ROE), stock return, and the overall financial performance measured by a comprehensive score (a combined measure of asset management, profitability, short-term solvency or liquidity and long-term solvency based on factor analysis). The effects of changes in the state of economy (real GDP   growth rate, ΔGDP$\Delta \mathit{GDP}$) and tourism growth (growth rate of total foreign tourist arrivals, ΔTA$\Delta \mathit{TA}$) on the corporate performance of tourist hotels are then examined via panel regression tests. Test results show that both ΔGDP$\Delta \mathit{GDP}$ and ΔTA$\Delta \mathit{TA}$ are significant explanatory factors of OPR  , but only ΔTA$\Delta \mathit{TA}$ can strongly explain ROA and ROE  . However, neither ΔGDP$\Delta \mathit{GDP}$ nor ΔTA$\Delta \mathit{TA}$ have a significant influence on hotel stock performance. Further, the economic factor (ΔGDP)$\left(\Delta \mathit{GDP}\right)$ is slightly more crucial than the industry factor (ΔTA)$\left(\Delta \mathit{TA}\right)$ in describing the overall financial performance in the Taiwanese hotel industry. Empirical findings offer valuable information for government tourism policymakers and tourist hotel owners and managers.     

Insider ownership and firm performance: An examination of restaurant firms

This study investigated the relationship between insider ownership and firm performance in the restaurant industry. Convergence-of-interests and entrenchment hypotheses were tested via cross-sectional and panel two-stage least square (2SLS) GMM estimation methods for linear and non-linear models. The study found that there is an overall positive and significant relationship between insider ownership and firm performance. The quadratic model showed that restaurant firm performance increased until insider ownership was between 38 and 40%, whereas it decreased after that point. Consistent with the quadratic model, the piece-wise regression model showed that insider ownership had a positive impact on firm performance within a range of 5–25% and a negative influence beyond 25% insider ownership. Consequently, this study revealed that convergence-of-interests and entrenchment effects of insider ownership co-exist in the restaurant industry. While convergence-of-interests effects are effective, an excessive granting of stock options or awards to managers could weaken firm performance due to entrenchment effects.     

Effects of different dimensions of corporate social responsibility on corporate financial performance in tourism-related industries

Although the stakeholder framework proposes the multidimensionality of corporate social responsibility (CSR) (Clarkson, 1995), previous research has yet to investigate the relationship between certain dimensions of CSR and corporate financial performance (CFP) in tourism-related industries. The purpose of this study was to disaggregate CSR into five dimensions based on corporate voluntary activities for five primary stakeholder issues: (1) employee relations, (2) product quality, (3) community relations, (4) environmental issues, and (5) diversity issues, and examine how each dimension would affect financial performance among firms within four tourism-related industries (airline, casino, hotel, and restaurant). While all CSR dimensions were proposed to have positive financial effects, results revealed that each dimension had a differential effect on both short-term and future profitability and that such financial impacts varied across the four industries. The findings can provide tourism managers with insights into which dimensions of CSR activities would improve their companies’ financial performance.     

Joint effects of management responses and online reviews on hotel financial performance: A data-analytics approach

Hotels are increasingly shifting their online review strategy from passive listening to proactive engagement through management responses. This study investigates the joint effects of management responses and online reviews on hotel financial performance. Based on a large unique dataset of 22,483 management responses to 76,649 online consumer reviews on TripAdvisor over 26 quarters, matched with quarterly hotel financial performance, this study finds that providing timely and lengthy responses enhances future financial performance, whereas providing responses by hotel executives and responses that simply repeat topics in the online review lowers future financial performance. Moreover, review rating and review volume moderate the effects of management responses. When the average review ratings increase, more management responses of greater length should be provided. As review volume grows, the benefits of providing timely and lengthy responses diminish. The study findings generate new implications for managing responses to online reviews to increase hotel financial performance.     

The relationship between institutional ownership and casino firm performance

This study examined the relationship between institutional ownership and firm performance in the casino industry from 1999–2003. Given the evidence of the endogeneity of institutional ownership in the casino industry, institutional ownership was found to be a significant and positive determinant of casino firm performance as measured by a proxy for Tobin's Q in a simultaneous equations system. This study reveals that investing institutionally in casino firms may help casino industry investors mitigate the agency problem caused by the separation of management from ownership. In addition, financial institutions tend to invest in larger casino firms with lower financial leverage.     

Impacts of positive and negative corporate social responsibility activities on company performance in the hospitality industry

In spite of growing concern for corporate social responsibility (CSR) in various industries including the hospitality industry, the relationship between CSR activities and financial performance is a rarely examined subject in the hospitality context. Especially, research measuring the separate impacts of positive and negative CSR activities on companies’ financial performances remains, as yet, unconsidered. Thus, this study examines different impacts of positive and negative CSR activities on financial performance of hotel, casino, restaurant and airline companies, theoretically based on positivity and negativity effects. Findings suggest mixed results across different industries and will contribute to companies’ appropriate strategic decision-making for CSR activities by providing more precise information regarding the impacts of each directional CSR activity on financial performance.     

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     

Board diversity and firm performance in the U.S. tourism sector: The effect of institutional ownership

This study examines the relationship between board diversity and firm performance in the U.S. tourism sector by using institutional ownership as a contingency that moderates this relationship. The study's sample includes publicly-traded companies from the U.S. restaurant, hotel and airline industries. The hypotheses are tested via two-way fixed-effects regression, and the findings of the study indicate that board diversity is positively associated with financial performance (Tobin's Q), and the effect of board diversity on performance is contingent on the degree of institutional ownership. More precisely, the study finds that board diversity has a larger effect on financial performance when institutional ownership is low on a tourism firm's ownership structure. Overall, the findings suggest that boards' internal control and monitoring on management is important to derive higher financial performance, and even yet it is more important when external monitoring by institutional owners, proxied by percentage of institutional ownership, is weak.     

The impact of quality management on productivity in the hospitality sector

This paper attempts to determine the relationship between quality and productivity in the hospitality sector. Although both variables are crucial to the competitive and value creation processes in hotels, few empirical studies have explicitly analyzed the relationship between them. Thus, we estimated a production function for a hotel sample that shows how a set of determinants influences labour productivity. Among these determinants we included different quality variables, defined from the point of view of total quality. The estimation results show a direct and significant effect of quality on labour productivity. This suggests that the implementation of total quality management (TQM) systems, or the adoption of the TQM principles, have a positive impact on hotel labour productivity.     

The managerial implications of an analysis of tourist profiles and international hotel employee service attitude

Numerous studies indicate that customer satisfaction is closely related to hotel employees’ service attitude, and that distinct segments of a target tourist market require distinct customer service emphases. The enclosed study finds, for example, that Taiwanese tourists generally appreciate friendliness and enthusiasm, Japanese tourists admire courteousness and propriety, and American tourists value immediacy and efficiency. Marketers and personnel managers are therefore well advised to develop training strategies emphasizing empathy, gracious problem solving, and prompt individual attention for Taiwanese, Japanese, and American tourists, respectively. Importance–performance analysis (IPA) can be used to identify crucial aspects of appropriate service and recommend managerial strategies to support their implementation.     

The effect of idiosyncratic price movements on short- and long-run performance of hotels

It is a common belief that businesses performance should not be evaluated by immediate fiscal returns, but rather based on an extended time horizon. While the literature implies that pricing decisions may exert lagged as well as contemporaneous effects on performance, a limited number of empirical studies have focused on such effects. The current study investigates effects of idiosyncratic price movements on short-run and long-run hotel performance, where idiosyncratic price movements refer to the changes in individual hotels’ room rates unexplained by price competition, product differentiation, and market conditions. By analyzing spatial panel data from the Houston lodging market between 2005 and 2014, we find that idiosyncratic price movements enhance hotel performance in the short-run and that adverse effects followed in the long-run. Findings of the study and implications for practitioners are discussed along with suggestions for future research.     

Star rating and corporate affiliation: their influence on room price and performance of hotels in Israel

The purpose of this paper is to ascertain whether and how star rating and corporate affiliation, as signals of quality, influence pricing decisions of hotels in Israel in various geographical locations, each with its specific market characteristics and during two different periods in which the business environment suffers from a crisis due to the political circumstances in the Middle East. The data suggests that the star-rating system, which is traditionally used to rate hotels’ quality, is a still stable and consistent predictor of room prices. However, in light of the increased usage of brand names in the Israeli industry, it was found that the ability to charge and receive a premium for the hotel corporate affiliation or brand name is not consistent. The analysis presents the case in which a premium for brand name is eroded by the influence of the crisis, by the level of corporate intensity in the region, and also by the relative strength of consumers in the different geographical locations.     

The impact of mega-sport events on tourist arrivals

While a mega-sport event is scheduled at least once every year somewhere in the world, these events are rare occurrences for the host cities and countries. The benefits of such events seem lucrative; the very fact that many countries bid to host these events suggests that the benefits – be they tangible or intangible – more often than not outweigh the costs. Using a standard gravity model of bilateral tourism flows between 200 countries from 1995 to 2006, this paper measures a very direct benefit of such mega-events: the increase in tourist arrivals to the host country. In general, the results suggest that mega-sport events promote tourism but the gain varies depending on the type of mega-event, the participating countries and whether the event is held during the peak season or off-season.     

The effect of subordinates’ gender on the difference between self-ratings,and superiors’ ratings,of subordinates’ performance in hotels

An appropriate means of subordinate managers’ performance evaluation in an organisation is crucial for identifying their strength and weaknesses for maintaining job commitment, and improving performance on on-going basis [Church, A., 1995. First-rate multirater feedback. Training and Development 49, 42–43; Church, A., Bracken, D., 1997. Advancing the state of the art of 360-degree feedback. Group and Organisation Management 22, 149–161; Atwater, L., Yammarino, F., 1997. Self-other rating agreement: a review and model. Research in Personnel and Human Resource Management. 15, 121–174]. The debate, on whether there is difference between subordinates’ self-ratings of their performance, and superiors’ ratings of it is better, continues. This is because the extant literature is inconclusive. This study contributes towards resolution of the debate at least for the hotel industry in Australia.     

The effect of hotel chain affiliation on economic performance: The moderating role of tourist districts

This paper offers a pioneering analysis of the impact that integration in different types of hotel chains has on firm performance, and the moderating effect of the tourist destination in this relationship. Studies in the literature examine both size and location independently, without reconciling the apparently contradictory trends of globalization and conservation of the local base. The aim of the research is to analyze the comparative effects on tourism firms’ performance of belonging to different types of hotel chains while maintaining the advantages of location in a tourist destination. Based on a study of 292 Spanish hotels, the authors test the proposed hypotheses using hierarchical regression analysis. The results show the advantages of non-equity chains over independent establishments. The study also finds a positive moderating effect of location in a district on the results yielded by belonging to a chain, whatever organizational form it takes.     

An investigation of AAA diamond rating changes on hotel performance

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.     

The impact of the SARS outbreak on Taiwanese hotel stock performance: An event-study approach

The severe acute respiratory syndrome (SARS) outbreak in 2003 weakened the Taiwanese economy. The tourism industry suffered the most, experiencing the highest stock price decline (approximately 29 percent) within a month of the SARS outbreak. This research examined the effect of the SARS epidemic on Taiwanese hotel stock price movements using an event-study approach. Seven publicly traded hotel companies experienced steep declines in earnings and stock price during the SARS outbreak period. On and after the day of the SARS outbreak, Taiwanese hotel stocks showed significantly negative cumulative mean abnormal returns, indicating a significant impact of the SARS outbreak on hotel stock performance. Empirical findings could be used to prepare businesses for the similar epidemics, such as a deadly bird-flu epidemic.     

The impact of sold-out information on tourist choice decisions

ABSTRACT

Travelers encounter sold-out situations when purchasing a vacation package during peak season. However, the influence of sold-out information has drawn little attention in tourism research. This study aims to understand the influences of sold-out products on travelers’ purchase intentions and final choices. To fulfill the research objective, 526 samples were collected by the online marketing firm in the United States. Results suggested that presenting information about sold-out products increases purchase intention toward a target product similar to the sold-out product, regardless of prior experience with a destination. Further discussions are provided in the main body of paper.     

The impact of living a calling on job outcomes

This study examined the relationship between living a calling, perceived insider status, psychological empowerment, and psychological well-being among hospitality employees. Additionally, this study explored the moderating role of organizational hierarchy (i.e., line-level employees, managers, directors). Results demonstrated that living a calling and perceived insider status were important for all employees but most meaningful for line-level employees, while the influence of living a calling on psychological empowerment was most important for managers or at the director level and above. The findings contribute to the callings and psychological well-being research by explaining how meaning through work impacts and is influenced by perceptions of informal and formal roles. Additionally, the study extends the understanding of these relationships through role theory. Managerial implications for promoting positive organizational outcomes are presented.