This study investigates and validates the reciprocal spillover effects model in the upward extensions of budget hotel brands to the midscale market. In particular, the relationships among the components of extended brand performance (i.e., quality, innovativeness, and involvement) and their effects on customer attitude toward parent budget brands are modeled and tested through an empirical study of three leading budget hotel brands in China and their mid-end extensions. Data were collected through an online survey of 790 customers and then analyzed using structural equation modeling. Results confirmed that the three extension performance components can directly or indirectly affect attitude toward parent brands. The findings of this study will assure budget hotel groups that step-up brand extension can be beneficial to their original brands.
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