Business Performance and Strategic Management Options in Hospitality: The Case of Lisbon City

Sérgio Borges,Nuno Gustavo

doi:10.5539/ijbm.v10n9p33

Abstract

This research addresses the growing hotel market phenomenon where two dominant strategic management models coexist: Hotel chains and independent hotels. In this context, this research intends to study the main strategic and operational management differences of these two business models and their differences in terms of business performance. The case study presented focuses on the city of Lisbon (Portugal) with a total sample of 114 hotels surveyed. Taking the Balanced Scorecard methodology as reference for the empirical analysis, the several associated indicators allowed us to compare and understand the differences in performance between the hotels integrated in international chains and the independent ones, or those belonging to small local hotel groups. The SPSS 20.0 version was used to carry out the research analysis. If, on the one hand, the empirical evidence points to the fact that units integrated in hotel chains have more standard operating procedures and a more complex management structure, on the other, with respect to various financial indicators (Gross Operating Profit, Room Profit and Food & Beverage Profit, etc.) there were no significant differences between the two types of hotel management model.

Highlights

The current prominence of the tourism industry in the global economy is understood when one looks at the overwhelming growth characteristics that this sector has been presenting over the past decades.According to Buhalis and Costa (2006), in the 70s, the number of international arrivals increased by 675 million compared to the 50s
The properties of the hotel chain type showed a higher number of hotels classified as four star hotels (30%, N = 34) and five star hotels (13%, N = 15)
If we look at independent hotel units, there is an overwhelming majority of hotels that do not study the “return on investment” whenever they make an investment (98 %, N = 39)

Summary

Introduction

The current prominence of the tourism industry in the global economy is understood when one looks at the overwhelming growth characteristics that this sector has been presenting over the past decades.According to Buhalis and Costa (2006), in the 70s, the number of international arrivals increased by 675 million compared to the 50s. According to the existing projections, it is expected that by 2030 the number of arrivals reaches 1.8 billion, growing at a rate of 3.3% per year, i.e., the average number increasing by about 43 million annually (UNWTO, 2011). The reasons for this increasingly higher rate growth relate mainly to the enormous transformations that occur both at the supply and the demand level, which are leveraged by a socio-economic context in constant change, which as Evans (2015) points out, has a decisive impact on any industry. In a world that is more global, with an increasingly comprehensive technological drive, where interconnections multiply, where consumer habits are modified at a more accelerated pace, where structural changes occur at the level of employment, family and socio-economics, an effective response from the industry and the tourist and hotel organizations is required, and that response necessarily involves innovation when maximizing resources, the creation of new business models, the personalization of consumer experience and the increase of quality standards of services rendered, among other things

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