Brand Affiliation and the Hotel Asset Market
International Journal of Hospitality Management
Brand affiliation represents a signal about the future operating performance of a hotel that reduces information asymmetries between hotel buyers and sellers. However, information asymmetries vary across property-level and locational characteristics of hotels. We hypothesize that hotel brand affiliation as a signal is most valuable to investors when information asymmetries are higher due to hotel characteristics such as a lower-tier hotel class, suburban location, or poorer building condition. Using a sample of 23,323 hotel transactions from 1986 to 2021, we provide evidence that branded hotels with characteristics indicating higher information asymmetries achieve a higher transaction price and shorter marketing time than similar independent hotels. Transaction price and marketing time do not differ between branded and independent hotels with characteristics indicating lower information asymmetries.
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Wu, L., Liu, P., & Le, D. (2023). The role of public space in constructing experience capital: A longitudinal analysis in the hotel context. Tourism Management, 97, 104735.