Cornell Study Finds Differential Benefits to Hotels Marketing Expenses
Loyalty Programs Usually Improve Income, Says Article in Cornell Hospitality Quarterly
The benefit of hotel marketing expenditures depends in part on the hotel's market segment and in part on the type of expenditure. An analysis of marketing expenditures published in the November 2008 issue of Cornell Hospitality Quarterly shows that the return on marketing expenses depends in part on the hotel's product segment, or chain scale. The article, "The Relationship of Sales and Marketing Expenses to Hotel Performance in the United States," is the featured article in the current Cornell Hospitality Quarterly, and is available for download from the Center for Hospitality Research at http://www.hotelschool.cornell.edu/research/chr/pubs/quarterly/featured/. The full Quarterly is available from Sage Publishing (http://www.sagepub.com/).
At the same time, certain expenses are associated with lower operating income for some hotel types. The study found a significant, negative relationship between marketing payroll expenses and income for economy hotels, for instance. In contrast, some hotels benefited from higher marketing payroll expenses (notably, luxury and upscale properties). Overall, O'Neill and his coauthors concluded that their study shows the importance of so-called "marketing, other" expenditures to hotel income, but it also shows that hotel managers need to analyze the effect of each type of expense.
O'Neill and Mattila are on the faculty at The Pennsylvania State University, while Hanson is at New York University.
Published by Cornell's Center for Hospitality Research, theaward-winning Cornell Hospitality Quarterly (formerly Cornell Hotel and Restaurant Administration Quarterly) is available by subscription from Sage Publishing at http://cqx.sagepub.com/.
About the Center for Hospitality Research
The purpose of the Center for Hospitality Research is to enable and conduct research of significance to the global hospitality and related service industries. CHR also works to improve the connections between academe and industry, continuing the School of Hotel Administration's long-standing tradition of service to the hospitality industry. Founded in 1992, CHR remains the industry's foremost creator and distributor of timely research, all of which is posted at no charge for all to use. In addition to its industry advisory board, CHR convenes several industry roundtables each year for the purpose of identifying new issues affecting the hospitality industry.
Center Members: Accenture • Access Point Financial, Inc. • Barclaycard US • Cvent • Davis & Gilbert LLP • Deloitte & Touche USA LLP • DerbySoft • Four Seasons Hotels and Resorts • Fox Rothschild LLP • Hilton Worldwide • Host Hotels & Resorts • Hyatt Hotels Corporation • IDeaS Revenue Solutions • InterContinental Hotels Group • Jumeirah Group • Marriott International • NTT DATA • Preferred Hotels & Resorts • priceline.com • PwC • The Rainmaker Group • RateGain • ReviewPro • Revinate • Sabre Hospitality Solutions • STR • Taj Hotels Resorts and Palaces • Tata Consultancy Services • Wipro EcoEnergy • Wyndham Hotel Group