Hotel owners increasingly rely on hotel management companies to operate their hotels through formalized hotel management agreements (HMA). Separating ownership and operations supposedly benefits both parties: owners are able to invest in hotel real estate and access the professional operating expertise of hotel management companies, while operators can generate important income streams, expand any brands they may have, and earn profits, all without having to invest in the underlying real estate.
While hotels have long used traditional management accounting practices, their use of contemporary strategic management accounting (SMA) techniques has not been as widespread. As researchers, this intrigued us because studies conducted outside the hotel industry had found that the relationship between firm strategy and firm performance was significantly enhanced through the use of SMA techniques.
Corporate Social Responsibility (CSR) programs are supposedly useful for helping companies to manage the triple bottom line of Profit, People and Planet. In other words, their impact on the environment (planet), their community and standard of living (people), and their economic responsibility of generating profits.
Hotel owners increasingly contract hotel management companies to operate their properties. While extensive research has examined management agreements to determine the balance of power between owners and management companies, little research has investigated the actual role that hotel owners play in property-level decision making.
One of the great 20th century philosophers, Major League Baseball player and pundit Yogi Berra, once opined, "It's hard to make predictions, especially about the future." And while we may nod at this oft-quoted remark, smirking at its cleverness, in business we nevertheless find ourselves every couple of years trying to do just this: forecast how the future will turn out.