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Entry, Ownership Form, and Spatial Location: An Analysis of the Hotel Industry

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  • Helmers, Claes Gustav
  • Connor, John M.
  • Florax, Raymond J.G.M.
  • Vroom, Govert

Abstract

This paper analyses the impact of ownership type on the locating behavior and capacity choice of prospective entrant hotels. An important aspect which has often been neglected in the entry literature is the relevance of the ownership that defines an establishment. A hotel outlet can be company-owned, franchised, or independently owned. As this is an important driver of the incentive structure for a firm as well as a strategic indicator for its (prospective) competitors, this paper argues that ownership form is a necessary explanatory factor in market conduct analysis. We show using a spatial lag model that a disaggregated analysis provide a good understanding of market interaction among hotels.

Suggested Citation

  • Helmers, Claes Gustav & Connor, John M. & Florax, Raymond J.G.M. & Vroom, Govert, 2009. "Entry, Ownership Form, and Spatial Location: An Analysis of the Hotel Industry," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49561, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea09:49561
    DOI: 10.22004/ag.econ.49561
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    References listed on IDEAS

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