Cornell Study Finds Rescaled Hotels Make More Money... Eventually
Cornell Hospitality Quarterly says finances take two years to improve
ITHACA, NY, July 31, 2009 - New hospitality management research suggests that rebranding and moves in market scale result in positive financial effects after two years or more. A hotel revenue management study of 95 properties, " Rebranding and Rescaling: Effects on Hotel Performance," by Bjorn Hanson, Anna Mattila, John O'Neill, and Yong Hee Kim, is the featured article in the August 2009 edition of the Cornell Hospitality Quarterly. Through a special arrangement with Sage Publishing. Sage manages the journal for the Quarterly's publisher, the Cornell School of Hotel Administration's Center for Hospitality Research.
Sixty-four of the 95 hotels in the hotel revenue management study moved downward in their market scale, and more than half of those downwardly mobile hotels switched from midscale to economy properties. Ten hotels changed brands but not market scale. The hospitality management research analysis found that the hotels' financial performance generally improved in the second year after they rescaled. During the first year after the changeover, net operating income diminished, probably due to temporary occupancy declines and the expenses of making alterations.
The Hanson group found that hotels which moved upward in scale saw higher ADRs, while those that moved downscale generally saw no change in ADR, meaning that they were able to hold their rates even as they moved downmarket. The study found no significant change in financial ratios for the few hotels that rebranded without rescaling. Hanson is an associate professor at New York University, while Mattila and O'Neill are faculty members at Pennsylvania State University, where Kim is a doctoral candidate.
The article is available at no charge at: www.hotelschool.cornell.edu/research/chr/pubs/quarterly/featured/.
Published by Cornell's Center for Hospitality Research, the award-winning Cornell Hospitality Quarterly is available by subscription from Sage Publishing at cqx.sagepub.com.
Marriott International, Inc. (NASDAQ: MAR) is a global leading lodging company based in Bethesda,Maryland, USA, with more than 4,200 properties in 80 countries and territories. Marriott International reported revenues of nearly $14 billion in fiscal year 2014. The company operates and franchises hotels and licenses vacation ownership resorts under 19 brands, including: The Ritz-Carlton®, BVlgari®, EDITION®, JW Marriott®, Autograph Collection® Hotels, Renaissance® Hotels, Marriott Hotels®, Delta Hotels and Resorts®, Marriott Executive Apartments®, Marriott Vacation Club®, Gaylord Hotels®, AC Hotels by Marriott®, Courtyard®, Residence Inn®, SpringHill Suites®, Fairfield Inn & Suites®, TownePlace Suites®, Protea Hotels® and MoxyHotels®. Marriott has been consistently recognized as a top employer and for its superior business ethics. The company also manages the award-winning guest loyalty program, Marriott Rewards® and The Ritz-Carlton Rewards® program, which together surpass 50 million members. For more information or reservations, please visit our website at 
