Research Recap: The relationship satisfaction factor in successful brand-hotel partnerships
Written by Chekitan Dev, James Brown, Jody Crosno, & Yuerong Liu
“Relationship satisfaction: An overlooked marketing channel safeguard”
The more a hotel is required to make investments in brand standards, the more likely it is to engage in self-interested opportunism to recover investment costs and assert its independence, a new study co-authored by Chekitan Dev, professor of marketing at the School of Hotel Administration, shows.
The study examines the relationship between key operating factors and opportunism on the part of brands and their hotel partners. Based on a survey of 296 hotel general managers whose properties are affiliated with either of two major hotel brands operating in the United States and Canada, and a matching survey of 37 brand representatives working for the brands to support the hotels, the study found that a hotel is more likely to engage in opportunism when it has made significant investments in physical and knowledge assets to support the brand with which it is affiliated. However, the hotel will be less likely to engage in opportunism when it is satisfied with its channel relationship, but this effect is moderated by the ease with which the brand can monitor the property’s behavior.
The study divided brand standard investments into physical investments (e.g. signage, signature décor) and knowledge-based investments (e.g. training regiments, computer systems). Opportunism was defined as self-interest-seeking guileful behavior, or either party trying to ‘game’ the relationship for its own benefit. Relationship satisfaction was measured as the hotels’ satisfaction with brand headquarters, and monitoring ease was a measure of the ease with which brand headquarters can observe a property’s performance and compliance with brand standards. The study controlled for property ownership type, brand affiliation, duration of the property–brand affiliation, and property size.
Based on prior theory and research, Dev and his co-authors expected to find that significant investments in brand standards will motivate a hotel to engage in opportunism against its brand to recover its investment, but if a hotel is satisfied with its relationship with the brand, it will be less likely to act opportunistically. The study found that investments in brand standards do in fact motivate hotels to act guilefully out of self-interest. A counter-intuitive and surprising finding was that the easier it is for a brand to monitor a hotel, the more likely the hotel is to behave opportunistically. The authors’ explanation for this finding is that a property’s awareness that it is being monitored closely fuels resentment, adding to its perceived lack of autonomy, and thereby motivating opportunistic behavior to regain that perceived loss of autonomy. However, the higher the level of relationship satisfaction (i.e. if a property believes that its brand affiliation is good for business), the less likely it will act opportunistically. Therefore, relationship satisfaction helps reduce the level of opportunism on part of the hotel.
The study adds to the body of knowledge on hospitality branding by confirming that relationship satisfaction acts as a safeguard against brand partner opportunism and by showing that the easier it is for a brand to monitor a property, the stronger the hotel’s motivation to pursue its own self-interest, so ease of monitoring by itself will not make up for a low level of relationship satisfaction. Satisfaction with a brand relationship and a property’s perceived autonomy are key factors to discourage such opportunism and ensure relationship success.
For hotel brand managers, the study generates important implications. Wielding a heavy “overseer” hand with affiliated hotels can motivate those properties to engage in opportunism, not only to recover investment costs but also to assert their independence. Brands should, therefore, resist the urge to rely solely on monitoring their properties to ensure a successful relationship and cultivate satisfaction with their affiliated hotels by maximizing value added (marketing support, business assistance, training, technical support, two-way communication, collaborative decision-making, etc.) and minimizing value extracted (franchise fees, royalty fees, reservation fees, technology fees, loyalty program fees, dictatorial decision-making, etc.).
The major results or implications of the research:
- The more a hotel is required to make investments in brand standards, the more likely it is to engage in self-interested, guileful opportunism.
- The easier it is for a brand to monitor a hotel, the more likely the hotel is to behave opportunistically.
- Such opportunism is less likely to occur when a hotel is satisfied with its relationship with the affiliated brand, thereby safeguarding the brand against hotel opportunism.
Marketing channels, brand management, hospitality branding, hotel management
Schools and contributing organizations:
- Cornell University
- West Virginia University
- James R. Brown, professor emeritus, West Virginia University
- Jody L. Crosno, associate professor, West Virginia University
- Chekitan S. Dev, professor, Cornell University
- Yuerong, Liu, doctoral student, West Virginia University
“Relationship satisfaction: An overlooked marketing channel safeguard” was published in Industrial Marketing Management, Volume 87, in May 2020.