The financial impact of online customer reviews in the restaurant industry: A moderating effect of brand equity

The salient impact of electronic Word-of-Mouth (eWOM) on firm performance has been widely noticed by scholars and practitioners. While eWOM serves as an important source of information that helps reduce perceived uncertainty risks in service purchases, it is highly likely that other sources of information are simultaneously used with eWOM in the purchase decisions. Thus, this study empirically examined the financial effects of restaurant eWOM (review volume and review rating) and their changes in the presence of brand equity. Three-stage least squares analysis was employed in the empirical investigation. Our findings revealed that review volume and review rating contributed to restaurant profitability. Brand equity was found to moderate the effects of the review attributes on restaurants profitability, which implies that eWOM has a greater influence on the financial performance of weak-branded restaurants than strong-branded ones. Implications for researchers and practitioners are discussed.     

Benchmarking firm capabilities for sustained financial performance in the U.S. restaurant industry

This study is designed to present an empirical assessment of important firm capabilities appropriate for benchmarking and on which firm capabilities restaurant firms should focus to achieve sustained financial performance. It also examines the key normative benchmarking theory premise that firm capabilities associated with sustained financial performance can be identified and that a firm's capability gaps, defined herein as the capability gaps between the firm and the selected benchmark firms (e.g., Camp, 1995), explain its financial performance. Lastly, this study shows how to use profile deviation to benchmark firm capabilities and extends this methodology by employing a model that incorporates interdependencies among firm capabilities. Findings offer pragmatic guidelines for restaurateurs to exercise benchmarking to pinpoint and enhance firm capabilities that would lead to sustained competitive advantage.     

Cross-listing effect of U.S. casino companies: Risk-adjusted performances

Globalization and market liberalization have resulted in more firms being listed on foreign stock exchanges. Even though cross-listing is an important corporate financial decision, research in this area for the hospitality discipline has been limited. The current study investigates issues of international cross-listing from the perspective of diversification. The findings from examination of five risk-adjusted measurements—Jensen's Alpha, Treynor Index, Sharpe Ratio, Sortino Ratio, and Upside Potential Ratio—for U.S. casino companies show that cross-listing improves U.S. casinos’ performances in terms of Jensen's Alpha and Sharpe Ratio, but not in terms of the other three measures.     

Perceptions of restaurant employees in Asia Pacific on sexual harassment in the hospitality industry

A major issue facing all of the hospitality industry is that of sexual harassment and the explosion of the number of sexual harassment lawsuits being filed. According to the National Restaurant Industry (U.S.) in 1998, in certain states there are more sexual harassment lawsuits than slip and fall cases filed within the restaurant industry. With the cost of litigation and the dollar amount of settlements both increasing substantially, it is with a pro‐active view to look at the perspective of sexual harassment by restaurant employees. The purpose of this study was to measure the perceptions and attitudes of service personnel, specifically restaurant employees in Hawaii on sexual harassment.     

Impact of the COVID-19 pandemic: Evidence from the U.S. restaurant industry

The current study examines how the effect of COVID-19 on U.S. restaurant firms’ stock returns varies according to the firms’ pre-pandemic characteristics by employing three firm-level dimensions (financial conditions, corporate strategies, and ownership structure). Employing 795 firm-year observations obtained from annual reports and other databases, this study found that restaurant firms with past characteristics of larger size, more leverage, more cash flows, less ROA, and more internationalization are more resilient to stock declines reacting to COVID-19 than otherwise similar firms. Whereas, dividend, franchising, institutional ownership, and managerial ownership did not show any significant moderating effect on the relationship between COVID-19 and stock returns. This study sheds light on the research topic by providing insights into drivers of restaurant firm’s stock returns during the COVID-19 shock. Future studies can employ the variables and method used in the current study to extend the understanding of the issue.     

Economic policy uncertainty and corporate investment: Evidence from the U.S. hospitality industry

The study of how uncertainty affects hospitality firms’ decisions is gaining attention in recent years. We examine the effect of Economic Policy Uncertainty (EPU) on the investment policy of a sample of 305 hospitality companies in the U.S. for the period 2001–2018. Applying generalized methods of moments (GMM) technique, we find that investment policies in hospitality companies are negatively affected by EPU. Panel quantile estimations reveal that the effect of EPU on corporate investment is only relevant for companies in the lower quantile of capital expenditures ratio. Our paper also provides policy implications to related parties.     

Analysis of the financial practices of high and low performing firms over periods of peaks and troughs of the restaurant industry cycle

This study examined the financial practices of high and low performing firms in the restaurant business over the industry cycles. The purpose is to determine whether differences exist in the financial practices of high performers versus low performers during different stages of the cycle. In this manner, this study is able to reveal the nature of financial practices of successful firms in the restaurant business. Results show that the patterns of exercising their financial strategy over the industry cycles are significantly different. The findings of this study can be used for improving corporate investment performance through understanding the cyclical behavior of the economy and the restaurant industry. This should then presumably result in competitive investment decisions of various firms, thereby improving the effectiveness of resource allocation.     

基于亲景度的美国旅华市场拓展研究--以我国六大旅游热点城市为例

本文引入亲景度的概念，利用亲景度指标，以美国游客作为研究对象，根据不同年度美国游客旅华的人数．分析了美国游客对北京、上海、广州、西安、昆明、桂林六大热点城市的亲景度，揭示了美国游客在进行旅游目的地选择方面的偏好程度，提出了深层次开发美国客源市场的对策，从而确定针对美国客源市场的拓展方向。     

Antecedents and consequences of Franchisee satisfaction in the U.S. restaurant industry

This study surveyed 3,177 franchisees from 58 restaurant brands with the purpose of examining the antecedents and consequences of franchisee satisfaction in the U.S. food service sector. Findings indicate that a high level of franchisee income and franchisor care and trust are associated with a high level of franchisee satisfaction. Education had a negative impact on franchisees' satisfaction, suggesting that the higher the level of franchisee education, the less franchisees were satisfied with the franchise. Furthermore, the higher the franchisees' satisfaction was, the stronger the franchisees' intention to remain in the franchise system was, and the higher the likelihood of recommending the franchise to others.     

CSR and financial performance: The role of CSR awareness in the restaurant industry

Initiatives for corporate social responsibility (CSR) often have served business as a source of competitive advantage. However, despite firms’ attempts to capitalize on their CSR efforts, stakeholders’ low awareness of these initiatives makes it difficult to realize the full value of the strategic CSR. In this study, we propose and test in the context of the restaurant industry whether CSR awareness, measured by CSR media coverage, moderates the relationship between the social and financial performance. Our results support the notion that stakeholders’ CSR awareness affects the manner in which CSR initiatives can result in financial gain. Our research has implications both for firms’ investment policies in social initiatives and for highlighting the importance of communicating CSR initiatives to relevant stakeholders.     

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     

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.     

A Proposed Research Agenda for the Refinement of the High Performance Work System Construct in the U.S. Restaurant Industry

Abstract

The current research proposes a framework for the investigation and conceptualization of high performance work systems in the U.S. restaurant industry. The projected U.S. restaurant industry sales for 2006 are $511.1 billion according to the National Restaurant Association (National Restaurant Association, 2005). Because of its size and impact on the foodservice industry and the hospitality industry in general, improving the performance of the restaurant industry could help increase overall revenues and guest satisfaction in the foodservice and hospitality industry. By identifying a list of high performance work practices in the industry, a more in-depth exploration of these practices and then organizational policies can be aligned together to help improve overall performance in the U.S. restaurant industry. The current study provides theoretical background and support for the high performance work systems theory.     

A longitudinal investigation to test the validity of the American customer satisfaction model in the U.S. hotel industry

This study was designed to test the validity of the American Customer Satisfaction Index (ACSI) model specifically for the hotel industry. The main objective of this study was to determine consistency of the ACSI hotel model over three periods: 1994, 2001, and 2009. The model was tested using the Structural Equation Modeling (SEM) technique using a two stage data analysis procedure. The findings from multi-group structural equation modeling showed that the model fit of ACSI lodging is consistent, regardless of economic conditions, demonstrating the validity of that model. Several plausible interpretations are presented in explaining meaningful patterns of path coefficients, for each of the study test periods. Furthermore, as the model tests validate the model fit of the hotel ACSI, academicians studying customer satisfaction may use the theoretical underpinnings and conceptual foundation of the model as a basis for their research.     

The impact of advertising on patrons’ emotional responses,perceived value,and behavioral intentions in the chain restaurant industry: The moderating role of advertising-induced arousal

The purpose of this study was twofold: to investigate the structural relationships between patrons’ emotional responses induced by advertising, their perceived value, and their behavioral intentions in the chain restaurant industry; and to investigate which attributes of advertising bear the strongest impact on behavioral intentions. Based on the literature review, six evaluative dimensions of advertising were derived: relevant news, brand reinforcement, stimulation, empathy, familiarity, and confusion. Theoretical relationships between these six evaluative dimensions and patrons’ emotional responses, perceived value, and behavioral intentions were derived based on the literature review. Following the collection and analysis of data obtained from chain restaurant patrons, it was found that four dimensions of advertising in particular (relevant news, stimulation, empathy, and familiarity) have a significant impact on inducing emotional responses in patrons. Among the four dimensions, stimulation was found to bear the most significant effect on patrons’ emotional responses. It can thus be stated that advertising-induced emotional responses positively influence patrons’ perceived value. During this study, it was found that the level of arousal induced by advertising plays a moderating function in the relationship between patrons’ emotional responses and hedonic value. The possible interpretations of these findings and their managerial implications are discussed in the latter part of this article.     

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.     

Perceptions of Chinese restaurants in the U.S.: What affects customer satisfaction and behavioral intentions?

This study investigates American customers’ perceptions of Chinese restaurants in the U.S., using the Importance–Performance Analysis (IPA) approach. This study also examines which attributes of Chinese restaurants influence American customers’ satisfaction and behavioral intentions. The IPA shows that environmental cleanliness and attentive service are two important areas where Chinese restaurateurs can make improvements. In addition, food taste and service reliability appear to be key attributes for Chinese restaurants’ success. Overall, this study indicates that food quality, service reliability and environmental cleanliness are three pivotal attributes to create satisfied customers and positive post-dining behavioral intentions. Chinese restaurant managers should reasonably allocate their limited resources to restaurant attributes based on their contributions to customer satisfaction and behavioral intentions.     

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.     

The moderating effect of place attachment on the relationship between festival quality and behavioral intentions

The main purpose of the study is to examine an impact of festival quality on behavioral intentions and investigate the role of place attachment (PA) as a moderator between festival quality and behavioral intentions. Data were collected from the visitors of the 2013 Seoul Lantern Festival in South Korea. Results show that festival quality has a significant direct impact on behavioral intentions to revisit, spread word of mouth (WOM), and engage in pro-environmental behavior. The study also reveals that PA moderates the effect of festival quality on behavioral intentions, suggesting the differential impact of festival quality based on the level of PA. The study suggests that festival organizers may want to focus on program and esthetics to promote visitors’ return and positive WOM. Festival organizers may also want to customize quality management strategies based on visitors’ level of PA.