HOTELS

Chain versus Independent Hotels



Chain versus Independent Hotels

Introduction

Conventions and meetings are often an integral part of a hotel's revenue generation effort. According to Astroff and Abbey (1998), they account for as much as 70% of total sales volume in major hotels. In smaller properties about 15-20% of sales are attributable to the convention business. There are, however, several other reasons apart from conventions' sizable contribution to a hotel's revenue that make them attractive to a hotel.

In addition to room revenue generated by convention attendees, revenue is also generated by conventioneers utilizing other hotel services (e.g., restaurants, drugstores). Spouses, often accompanying convention delegates, generate additional business for the various hotel services. Conventions allow a hotel to forecast advance bookings and can fill gaps in slack periods. Finally, conventions and meetings are excellent prospects for repeat business, provided attendees are satisfied with the services of the hotel.

The repeated use of a hotel chain for an association's conventions and meetings is, however, not only dependent on the satisfaction of convention attendees but also on the satisfaction of the meeting planner. In many instances meeting planners have not only considerable influence on the choice of the convention destination but also, and perhaps even more so, on the choice of the convention hotel.

Clark et al. (1996) noted that despite the influence of other members of the association's buying center, the meeting planner is often a key figure in the decision on the repeated use of a particular hotel for the association's conventions and meetings. Yet to date very little academic research has focused on meeting planners' relationship with hotel chains, and their loyalty to specific chains.

The majority of previous studies has concentrated on determining and ranking physical hotel facilities important to meeting planners in the hotel selection process (e.g., Crocker, 1990; Hu and Hiemstra, 1996; Renaghan and Kay, 1987). In contrast, Rutherford and Umbreit (1993) identified and analyzed the various critical service encounters between meeting planners and hotel staff — an aspect that had received little attention thus far despite being considered a crucial concern of meeting planners ( Stavro and Beggs, 1986).

They concluded that communication, organization, implementation, initiative, developing relationships, and crisis management present the integral elements of the interaction between hotel staff and meeting planners. Personal services, reflected in the responsiveness and accessibility of critical hotel staff, emerged as the factor having the greatest impact on meeting planners' satisfaction with hotel convention services in a study by Shaw et al. (1991).

This paper focuses on the relationship between association meeting planners and hotel chains. Prior to assessing certain issues relating to meeting planners' loyalty to hotel chains planners' preference for hotel chains rather than independent hotels and the reasons for this preference are ascertained. Then, the different dimensions of loyalty of meeting planners to specific hotel chains are examined, followed by an assessment of specific practices, features, and benefits that meeting planners regard as important in developing loyalty to a particular chain.

These importance ratings are contrasted with planners' performance ...