A Comparison of the Performance of Brand-Affiliated and Unaffiliated Hotel Properties

Steven A. Carvell, Linda Canina, Michael C. Sturman

Research output: Contribution to journalArticlepeer-review

14 Scopus citations

Abstract

Research has shown that performance differences exist between brand-affiliated hotels and unaffiliated properties. However, the extant empirical results are mixed. Some research has shown that brands outperform unaffiliated hotels on various metrics, whereas other research has shown the opposite. This article analyzes this issue using a matched-pair approach where we compare the performance differences of brand-affiliated and unaffiliated properties between 1998 and 2010. The matched-pair approach ensures that local competitive conditions as well as hotel characteristics are the same across the comparison pair. In addition, all potential omitted-variable bias and model misspecifications are avoided. Thus, to address our research question, we compare branded hotels with unaffiliated properties that are identical in age, market segment, location, and duration of operation, as well as having a similar number of rooms. Our analysis shows that performance differentials are present, albeit not systematic. We found no consistent advantages in all segments for either the affiliated hotels or the comparable unaffiliated properties, taking into account our comparison factors. That said, the methodology of our approach yields results that are more informative to the affiliation choice of owners and to the growth strategies of hotel brand–owner companies than those of previous empirical studies.

Original languageEnglish (US)
Pages (from-to)193-201
Number of pages9
JournalCornell Hospitality Quarterly
Volume57
Issue number2
DOIs
StatePublished - May 2015
Externally publishedYes

All Science Journal Classification (ASJC) codes

  • Tourism, Leisure and Hospitality Management

Keywords

  • corporate development
  • finance
  • marketing and sales
  • strategic management

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