LONG-AND SHORT-RUN STRATEGIC DECISIONS OF HOTELS: DIFFERENTIATION AND PRICING

Abstract

Developing a good strategy is important in today’s competitive and commoditized lodging market. A good strategy necessitates knowledge of what strategic actions can increase firms’ profits and maintain their profitability throughout market cycles. However, less research effort has been made to date to find and operationalize strategic actions of hotels that lead to higher performance. This dissertation empirically examines both short-and long-run strategic decisions of hotels and their consequences at the micro level, the result of which can be used to develop a good strategy ensuring sustainable success in business. The first part of this dissertation investigates the effect of conformity and differentiation on performance and performance risk of hotels, focusing on their long-run strategic tools—location, capacity, and quality. The second part of this dissertation examines the efficacy of hotels’ room rate discounts in performance recovery after a crisis, in which the price is a hotels’ short-run strategic tool. Using standard econometric methods and applicable variations, this dissertation found empirical evidence supporting hypotheses in both parts of the dissertation.