Corporate brand and hotel performance: A resource-based perspective

Abstract

Grounded in resource-based theory (RBT), our study analyzes the conditions that drive the effect of corporate brand on firm performance. Using a five-year panel of Spanish hotels, our results confirm that hotels with a corporate brand have greater profitability. Consistent with RBT, this effect is stronger when the corporate brand is more valuable to customers (e.g., in the lower-quality segment), when it is more difficult to imitate (e.g., older brands), and when it is exploited through specific organizational governance mechanisms (e.g., vertical integration). Contrary to RBT, we found that the effect of corporate brand on hotel's profitability is stronger when the use of corporate brand is less rare (e.g., when more hotels located in close proximity use corporate brands). Thus, the results provide general support for RBT, but also make an important qualification regarding the effect of resource rarity in industries where there may be agglomeration effects.