Hotel Brand Conversions: What Works and What Doesn’t

As many as one-third of U.S. hotels have been converted from one brand to another in recent years, a process that frequently improves the hotel’s financial performance—although that is not always the case. Using data collected between 1994 and 2012 from PKF Hospitality Research, an analysis of brand conversions by 260 hotels shows that hotels moving downscale generally improved their occupancy, and thus their top-line revenue and profit ratios, compared to a control group of 2,750 hotels that did not change brands. However, hotels that moved upscale did not see notable changes in revenue or profit, nor did hotels that moved across their tier, especially when they stayed within their brand family. Two factors seem to drive the financial results for converted hotels—the relative strength of the brand and the fit between the brand and the property.

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

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.

My Attitudes and Beliefs about Different Types of Research

[Excerpt] In this issue’s “From the Editor,” I describe a new review policy and process for both authors and reviewers. Authors should find that this new policy and process provides them with faster editorial decisions, higher quality feedback, and greater clarity about required revisions, as well as greater freedom to disagree with reviewers and to write the papers they (the authors) want. Reviewers should find that this new policy and process saves them from having to review obviously flawed papers and from having to review different versions of the same paper over and over again.

Lexical Interference in Semantic Processing of Simple Words: Implications for Brand Names

This study provides evidence for a Stroop-like interference effect in word recognition. Based on phonologic and semantic properties of simple words, participants who performed a same/different word-recognition task exhibited a significant response latency increase when word pairs (e.g., POLL, ROD) featured a comparison word (POLL) that was a homonym of a synonym (pole) of the target word (ROD). These results support a parallel-processing framework of lexical decision making, in which activation of the pathways to word recognition may occur at different levels automatically and in parallel. A subset of simple words that are also brand names was examined and exhibited this same interference. Implications for word recognition theory and practical implications for strategic marketing are discussed.