PLURAL FORM,RISK AND PERFORMANCE IN THE HOTEL INDUSTRY

Citation data:

Vol: 21, Issue: 1

Publication Year:
2013
Usage 9
Abstract Views 8
Downloads 1
Repository URL:
https://scholarworks.umass.edu/jhfm/vol21/iss1/4
Author(s):
chung, yeasun; Yoon, Nada
Tags:
plural form; franchising; management contract; risk; performance
article description
The plural form refers to the adoption of a multiple- distribution strategy: franchise, management, and full ownership. This study aims to help hotel owners, operators, and researchers to understand better the superiority of the plural form over a single form and the impacts of franchising and management on a firm’s overall risk and various performance variables. This study proves the plural form to be better than a single form at improving performance and lowering risk. The findings also suggest that a higher franchise percent within the mix of franchise, management, and ownership is likely to reduce further a firm’s risk. A higher management percent can increase some performance measures, but it does not reduce a firm’s risk. This study also suggests that the optimal proportion of franchising varies according to a firm’s emphasis on a particular performance. Lodging firms could utilize the findings of this study in making strategic choices about different business forms, before expanding their number of units in the market.