Changing tires on a moving car: the role of timing in hospitality and service turnaround processes

Corporate turnaround processes consist of two main strategies: retrenchment and recovery. Whereas retrenchment focuses on efficiency and cost reduction, recovery entails strategic repositioning for long-term growth. Prior research has emphasized the timing of turnaround strategies as critical for the overall turnaround success and proposed a sequential or simultaneous timing of retrenchment and recovery. However, a sequential timing of turnaround strategies may have important disadvantages in the particular context of the service sector, given that it may quickly lead to staff demotivation, declining service quality and loss of customers.This research investigates the timing of retrenchment and recovery activities in service industry turnarounds with a multi-method approach. 35 service industry turnarounds in the German-speaking markets of Western Europe (Austria, Germany, and Switzerland) were analyzed. Based on the results of the first study, the research was complemented with a qualitative study of six turnaround cases in the Swiss hospitality industry. The converging evidence from both studies suggests that retrenchment and recovery activities interact in predicting the performance of service turnarounds. This suggests that a simultaneous turnaround process provides a more adequate timing for turnarounds in the specific service environment. The findings have important implications for turnaround theory and for managerial practice in service turnarounds.     

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.     

Literature in strategic management in the hospitality industry

This literature review of the research in strategic management in the hospitality industry covers the 2 year period of 2002–2003. Using a contingency model framework for the analysis the research reported in refereed journals in the field of hospitality is reported. Additionally, research that considered the context of the hospitality industry but published in non-hospitality refereed journals was also included. Key issues and needs in the area are provided at the conclusion.     

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.     

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 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.     

Managing Workforce Diversity

Abstract

As hospitality firms become increasingly characterized by diversity with respect to their workforce, attracting, retaining, and using diverse people effectively have become a priority. Diversity management is considered vital to ensuring success in today's unpredictable hospitality markets. To suggest strategies for management of diversity, the current study explores the definitions used in dealing with diversity, clarifies diversity-related concepts, and discusses the benefits of effective diversity management. It is contended that hospitality firms that want fresh ideas, strong growth, a positive firm image, and an enhanced ability to hire qualified workers should be proactive with regard to workforce diversity. This study also suggests effective diversity management strategies, including the use of diversity management paradigms and development of a learning organization. Finally, the challenges hospitality firms are facing are discussed.     

Restaurants’ social enterprise business model: Three case studies

ABSTRACT

This research explores the application of the Social Enterprise business model within the context of the hospitality industry. In order to achieve this goal, a qualitative primary research was conducted through three case studies. The research suggests that hospitality social enterprises encounter many unique challenges as a result of social mission implications. The research provides a foundation for industry and academic recommendations. Most importantly, detailed recommendations such as strategic planning, strict budgeting, and mission/profit balance are derived for hospitality social enterprise managers to improve efficiency and counteract industry-specific challenges.     

Service-leadership competencies for hospitality and tourism management

Competency models have become useful tools for management development in hospitality and tourism organizations. At the same time, these models provide limited focus on leadership behaviors that facilitate employee service performance and customer satisfaction. The present study seeks to address this issue by developing a “service-leadership” competency model for use in the hospitality and tourism context. The following study reports on the results of interviews with 110 industry managers, which yielded a model of some 100 behaviors in 20 competency areas. These competencies cluster into 3 high order categories, namely business savvy, people savvy and self savvy. The results of the study are discussed in the context of extant research.     

Strategic alliances: a hospitality industry perspective

The article focuses on strategic alliance theory as it applies to the hospitality industry. Citing research as well as real-world examples, the authors integrate a variety of concepts and develop four propositions about the growing use of strategic alliances in the hospitality industry. These propositions include the following: P1: Hospitality alliances will evolve from equity joint ventures to collaborative joint ventures (non-equity) as competitor alliances will emerge. P2: Contractual agreements will evolve from simple franchise and management contracts to more complex resource-sharing, non-equity agreements. P3: Complex resource sharing between allying partners will help incumbent firms build relationships with partner firms that will lead to the development of competitor alliances. P4: Technology will help in the development of competitor alliances, which will also help to increase incumbent firms’ productivity and profitability.     

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.     

Digital identity and the construction of distinctiveness by American wineries

Hospitality and tourism entrepreneurs need to balance uniqueness with conformity. Organizational identity theory proposes that an organization’s central and enduring attributes make it distinctive while helping observers categorize it. Since distinctive value creation is central to success in hospitality, this study asks how entrepreneurs in hospitality and tourism construct distinctive identity claims and how these identities help firms create distinctive value. The research context is the American winemaking industry, where entrepreneurs strive to present their wineries as destinations. The data comes from the digital identity statements of 314 members of the WineAmerica trade association. We identify seventeen identity themes and several clusters of themes that demonstrate how entrepreneurial claims shape distinctive organizational identities and contribute to distinctive value creation.     

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.     

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.     

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.     

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.     

Research in the field of hospitality

In this paper a model of hospitality is introduced. In this model the three elements of the hospitality offer Product, Behaviour and Environment are linked with the elements of guest satisfaction (Needs and Objectives). The model can be used for, instance, as an organizer for curriculum development of hotel and catering schools. The hospitality industry itself can apply this model in finding solutions to their problems concerning product strategies.Some further research activities showed that the model can be used for qualitative research methods. It seems possible to make the model testable in the sense that a quantitative approach could be successful.     

The effectiveness of tryvertising in hotels

Advertising has been a common practice to promote products and services in the tourism and hospitality industry. Although ample research has investigated customers’ perceptions of and reactions to advertising visuals, direct experience advertising strategies, such as tryvertising have been ignored. As an emerging direct experience approach, tryvertising has been increasingly used in tourism and hospitality businesses especially in hotels. This study explores the effectiveness of tryvertising practices on customer purchase behaviors in hotel settings. Two real data sets that combine 6858 records of customers’ hotel stays and guestroom products purchase transactions were obtained from a hotel management company that uses tryvertising strategies in China. The results from a Heckit model analysis determine the potential factors that affect hotel guests’ likelihood to buy and the amount of money spent on products promoted through tryvertising. This study fills this void in the current literature that focuses on traditional mass advertisements and behavioral intentions rather than actual purchase behaviors. It contributes to the literature with empirical evidence of the impact of tryvertising strategies on consumer behaviors in a hotel context. Managerial implications are suggested for practitioners to customize their tryvertising strategies.     

Impacts of peer-to-peer accommodation on the hotel industry: Hoteliers’ perspectives

The sharing economy is a new phenomenon that has considerable implications for traditional industries in general and the hospitality sector in particular. Although some recent studies have investigated the effects of sharing economy on the hotel industry, they primarily focused on quantifying its effects which are not exploratory for a phenomenon. This study attempts to achieve two research objectives. First, an exploratory qualitative method via a semi-structured in-depth interview is employed to investigate the impacts of P2P accommodation on the industry from hoteliers’ perspectives in China. Second, the current study provides valuable insights about traditional hotel marketing and operations. A social science perspective is proposed because prior hospitality research, merely in its commercial sense, fails to capture the essence of hospitality. Results indicate that P2P accommodation has effects on the hotel industry in terms of host–guest interactions, product offerings, staff empowerment, and platform collaboration. The study also suggests that the extent to which P2P accommodation impacts the hotel industry is different in terms of hotel star ratings and operating model. P2P accommodation and the hotel industry in China have a supplementary relationship. This study contributes to social studies of the hospitality literature by gaining insights from hotel senior management level. It also has great implications for the hotel marketing and management practices within the sharing context.     

Dealing with customer incivility: The effects of managerial support on employee psychological well-being and quality-of-life

This research examines the effects of customer incivility and manager procedural and emotional support on employee psychological well-being (PWB) and work quality-of-life (WQOL). Study 1 uses the qualitative critical incident technique to content analyze employee perceptions, finding that incivility affects employee PWB and WQOL. Based on the results of Study 1, a conceptual model examines a 2 (procedural support: high vs. low) × 2 (emotional support: high vs. low) between-subjects experimental design in both a hospitality and general service context. Results from Study 2 and 3 find that managerial procedural and emotional support significantly affect employee’s PWB and WQOL. There is also a significant interaction effect of emotional and procedural support on PWB and WQOL. The research builds upon the incivility, managerial support, psychological well-being, and quality-of-life research as well as provides important managerial implications for actions service firms can take to minimize the negative effects.