Cornell Hospitality Quarterly

When hotel firms expand internationally, they must determine the ownership strategy and the management strategy that will best maintain the firm’s competitive advantage. Those decisions are made separately from each other and depend on the expanding company’s own strengths and the strengths found in the local market. That interplay between the company’s strengths and local resources drives the type of partnership or affiliation arrangement that the company uses to enter the foreign market. The decision regarding who controls management and marketing, for instance, depends to a large extent on whether the expanding company can rely on local interests to maintain the firm’s customer service standards. If the firm does not use customer service as a competitive advantage, it can make more use of third-party interests to operate the hotel. If the hotel facility is itself a point of competitive advantage, the decision on the extent of equity investment by the firm rests on whether local interests have sufficient resources to build and maintain the property.

The timeshare sector has grown substantially over the past decade in both size and product configuration. Focusing on the concept of customer-derived value, group interviews were conducted with owners of timeshare holiday products to assess the dimensions of customer value in timeshares. Twelve such dimensions of value emerged from the interviews, most notably knowledge enhancement. Six detractors of derived value were identified. With a better understanding of the sources of value for timeshare owners, managers can recruit new owners, develop products, and enhance the levels of satisfaction and loyalty among existing owners.

An analysis of a database compiled by the authors from claims recorded by the Ohio Civil Rights Commission found that three causes of action accounted for most employment-discrimination claims against restaurants in that state. Those causes are (in decreasing order of frequency) race, sex, and retaliation. When the restaurants are analyzed according to type, however, the frequency of claims changes. One particular change of note is the rise of retaliation claims, which overwhelmingly follow complaints based on other causes. This cause of action merits attention from restaurant operators because a retaliation claim can continue even if the original complaint fails or is dropped.

Dining in a table-service restaurant is a multilayered experience that involves at least three types of clues. Although food quality is basic, the ambience and service performance greatly influence a customer’s evaluation of a particular establishment. Diners use the following types of clues to judge a restaurant experience: functional—the technical quality of the food and service; mechanic—the ambience and other design and technical elements; and humanic—the performance, behavior, and appearance of the employees. While customers’ perceptions of mechanic clues are positively related to their expectations of the service, humanic clues dominate the influence of mechanic clues. Ideally, managers should orchestrate both humanic and mechanic clues to deliver a consistent service message.

The application of survival analysis to create a revenue management scheme for a casino’s table games is illustrated. Although logic suggests that table games revenue can easily be increased by manipulating minimum wagers, the matter is complicated by the nature of games, which allow “partial sales” (i.e., any number of hands) but do not allow a bet of zero, and in which actual demand is censored (when people are waiting to play). Survival analysis accommodates the time-played parameter while recognizing an inherent issue with capacity constrained supply. Optimization is then achieved by using traditional revenue-management tools, as demonstrated using a simulated data set.

In this article, the authors demonstrate how to use optimization combined with Monte Carlo simulation to model an investment decision by means of a case study of a hotel considering the converting a portion of its inventory to allergy-friendly rooms (by applying a proprietary method). Using survey data on consumer demand and hotel occupancy data, the model considers the random nature of occupancy to determine the optimal number of rooms to convert and the corresponding price to charge. In setting up the model, the authors demonstrate the limitations of traditional approaches using average occupancy data.

The newsvendor model is a classic approach to determining how to set appropriate inventory levels for products whose value is perishable. While the newsvendor analysis does not yield the richness of data found in a simulation-based model, newsvendor analysis provides a relatively simple way to determine inventory levels.

Allergy-friendly rooms carry a compelling marketing story, combined with a solid return on investment, provided a hotel’s management follows the complete program.