Hotel Branding Strategy: Its Relationship to Guest Satisfaction and Room Revenue

Abstract

U.S. hotel brands and international hotel brands headquartered in the United States have increasingly evolved away from being hotel operating companies to being brand management and franchise administration organizations. This trend has allowed for the accelerated growth and development of many major hotel brands and the increasing growth of franchised hotels. There are numerous strategic implications related to this trend. This study seeks to analyze some of these strategic implications by evaluating longitudinal data regarding the performance of major hotel brands in the marketplace, both in terms of guest satisfaction and revenue indicators. Specifically, the authors test whether guest satisfaction at variousU.S. and international brands influences both brand occupancy percentage and average daily room rate 3 years later. In addition, the authors investigate whether the percentage of franchised hotel properties influences both guest satisfaction and occupancy 3 years later. Also, they test whether overall brand size has a positive or detrimental effect on future hotel occupancy. Finally, whether the change in guest satisfaction for hotel brands effects the change in average daily rate during the same 3-year period is tested.