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The effect of advertising on market share instability in the hotel industry

Author

Listed:
  • Chiang-Ming Chen

    (National Chi Nan University, Taiwan)

  • Yu-Chen Lin

    (Soochow University, Taiwan)

  • Ho-Wen Yang

    (Feng Chia University, Taiwan)

Abstract

Although the theoretical literature on the effect of advertising is well developed, few empirical studies quantify the importance of advertising on the market share instability of hotels. This article investigates the influence of advertising on market share instability using Taiwanese international tourist hotel operation data. Telser argues that advertising reduces a leading firm’s market share instability by creating market power and entry barriers. This study provides empirical evidence for the theoretical inverse relationship between advertising intensity and market share instability among leading firms in the hotel industry. It identifies advertising as an important factor influencing the market share instability of hotels. Moreover, advertising tends to increase the market share instability of leading firms for different quantiles of the market share instability. The results lend moderate support to the validity of the hypothesis in the Telser model.

Suggested Citation

  • Chiang-Ming Chen & Yu-Chen Lin & Ho-Wen Yang, 2017. "The effect of advertising on market share instability in the hotel industry," Tourism Economics, , vol. 23(1), pages 214-222, February.
    • Handle: RePEc:sae:toueco:v:23:y:2017:i:1:p:214-222
    DOI: 10.5367/te.2015.0502
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    References listed on IDEAS

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    Cited by:

    1. Xue Sun & Yuhao Li & Bo Guo & Li Gao, 2023. "Marketing Automation: How to Effectively Lead the Advertising Promotion for Social Reconstruction in Hotels," Sustainability, MDPI, vol. 15(5), pages 1-20, March.

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