Why a New Name? The Role of Asset Characteristics and Broad Market Trends in Predicting Brand Affiliation Change in Hotels

Abstract

Brand affiliation is a critical choice in the hotel business. The decision to change brand (i.e., “rebranding”) may be determined by asset-level private information as well as publicly known information related to the property. In this article, we focus on nonprivate information, such as property features as well as market and industry performance indicators. Using the semiparametric and parametric hazard models, we show that variables such as hotels’ past record of affiliation changes, age, class, type, and location help predict the likelihood of rebranding. This analysis should increase the ability of industry practitioners to define rebranding risk and to use it as a competitive advantage.