FINANCE


Persistent Performance Differences in Lodging Properties Cornell Hospitality Quarterly, 64, 3, August 2023 LINK TO PAPER


LINDA CANINA


GEORGES C. AND MARIAN ST. LAURENT PROFESSOR Cornell Peter and Stephanie Nolan School of Hotel Administration


Cornell SC Johnson College of Business Cornell University


Co-authors • Linda Canina, Georges C. and Marian St. Laurent Professor, Cornell Peter and


Stephanie Nolan School of Hotel Administration, Cornell SC Johnson College of Business, Cornell University


• Gordon Potter, Cornell University (emeritus) Summary


Lodging executives are continually searching for ways to improve perfor- mance. Tis is particularly important now as the industry faces a tight labor market, rising costs, and uncertainty regarding the future of business travel. Prior research on best practices for the lodging industry were not linked to financial performance, so the industry has little guidance for executives man- aging property performance.


Using property-level data from the lodging industry, this study documents the existence of large and persistent performance differentials across lodging units. Tese exist after controlling for the resources utilized for the production of the service, as well as market conditions and hotel property characteristics and are most persistent for the highest and the lowest performers. Similar to studies that analyzed performance differences in other industries, this analysis leaves a large portion of the variation in performance differences unexplained. However, the authors do find that a small portion of these per- formance differences is related to the hotel property’s choice regarding chain size and hotel portfolio company scope, suggesting the possibility of benefits from scale economies and/or scope. Tis is an area ripe for future research that links attributes of the industry’s demand, management controls, or tech- nology to factors driving productivity.


TO IMPACT CONTENTS


RESEARCH WITH IMPACT: CORNELL SC JOHNSON COLLEGE OF BUSINESS • 2023 EDITION


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