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The quality of quality awards: Diminishing information asymmetries in a hotel chain

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  • Nicolau, Juan Luis
  • Sellers, Ricardo

Abstract

Services suffer to a great extent from information asymmetries because their attributes are more difficult to grasp in advance. Within services, the tourism industry is an especially notable and interesting case. Akerlof [Akerlof, G. The market for 'lemons': Quality uncertainty and the market mechanism. Quarterly Journal of Economics 1970; 84 (3): 488-500.] suggests the applicability of information asymmetries and counteracting institutions to hotel chains. To reduce these asymmetries different strategies have been proposed. Among them, quality certificates have become one of the most popular tools. However, two questions arise: one, are quality certificates effective tools to reduce information asymmetries in the tourism industry, with its inherent uncertainty? and two, are all types of existing quality certificates equally effective? Thus, the objectives of this study include analyzing the market value variation of a hotel chain due to quality certification, and to test the effect by type of award. The method builds from the event study technique and regression analysis. The results show that the stock market reacts positively to certificates, thus implying that quality certification can be a useful tool for reducing information asymmetry; however, this positive reaction is not equal for all kinds of certificates, the ISO 9000 shows the highest impact.

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  • Nicolau, Juan Luis & Sellers, Ricardo, 2010. "The quality of quality awards: Diminishing information asymmetries in a hotel chain," Journal of Business Research, Elsevier, vol. 63(8), pages 832-839, August.
    • Handle: RePEc:eee:jbrese:v:63:y:2010:i:8:p:832-839
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    6. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).
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    9. Meng-Ying Wang & Li-Chen Chou, 2024. "Evaluating information asymmetry effects on hotel pricing: a comparative analysis before and during the COVID-19 pandemic in the Taiwan’s market," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-12, December.
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    12. Hudson, John & Orviska, Marta, 2013. "Firms’ adoption of international standards: One size fits all?," Journal of Policy Modeling, Elsevier, vol. 35(2), pages 289-306.
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    14. Cacciolatti, Luca & Wan, Tingting, 2013. "A Study of Small Business Owners’ Personal Characteristics and the Use of Marketing Information in the Food and Drink Industry: A Resource-Based Perspective," International Journal on Food System Dynamics, International Center for Management, Communication, and Research, vol. 3(2), pages 1-14, January.
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    16. Sharon Teitler‐Regev & Tchai Tavor, 2023. "The effect of Airbnb announcements on hotel stock prices," Australian Economic Papers, Wiley Blackwell, vol. 62(1), pages 78-100, March.
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    19. Juan José Tarí & Jorge Pereira-Moliner & Eva M. Pertusa-Ortega & María D. López-Gamero & José F. Molina-Azorín, 2017. "Does quality management improve performance or vice versa? Evidence from the hotel industry," Service Business, Springer;Pan-Pacific Business Association, vol. 11(1), pages 23-43, March.
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    21. PAWLICZ, Adam, 2014. "Impact Of Civil Society Development On Self-Regulation. European Hotel Market Case," Academica Science Journal, Economica Series, Dimitrie Cantemir University, Faculty of Economical Science, vol. 1(4), pages 3-10, June.
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