The effect of advertising on market share instability in the hotel industry

Abstract

Although the theoretical literature on the effect of advertising is well developed, few empirical studies quantify the importance of advertising on the market share instability of hotels. This article investigates the influence of advertising on market share instability using Taiwanese international tourist hotel operation data. Telser argues that advertising reduces a leading firm’s market share instability by creating market power and entry barriers. This study provides empirical evidence for the theoretical inverse relationship between advertising intensity and market share instability among leading firms in the hotel industry. It identifies advertising as an important factor influencing the market share instability of hotels. Moreover, advertising tends to increase the market share instability of leading firms for different quantiles of the market share instability. The results lend moderate support to the validity of the hypothesis in the Telser model.

Marketing Automation: How to Effectively Lead the Advertising Promotion for Social Reconstruction in Hotels

“…Stable occupancy rates, high RevPAR, the availability of professional services, and the continuous customer source of excellent hotel chains have attracted many hoteliers to franchise chain hotels [3]. For the chain hotel groups, the goal is to expand market share and enhance brand effect by developing the "inventory market" [4,5]. In short, franchising is a win-win strategy for both hoteliers and chain hotel groups [4,6].…”

“…For the chain hotel groups, the goal is to expand market share and enhance brand effect by developing the "inventory market" [4,5]. In short, franchising is a win-win strategy for both hoteliers and chain hotel groups [4,6]. Determining how to efficiently promote the matching of information between hoteliers and chain hotel groups has become particularly important.…”

“…Several studies have demonstrated the importance of hospitality advertising on hotel group performance at the aggregate level [4,13,14] Although these studies have confirmed the significance of hotel advertising in the hotel chain industry, few articles have discussed how to practically improve the impacts of these ads in the hotel franchise industry. The existing research on the influencing factors of promotion performance is limited to the performance of "push" [15] and pays little attention to ad conversions.…”