How Does Hotel Design Contribute to Property Performance?

Document Type

Article

Publication Date

1-1-2018

Publication Title

International Journal of Contemporary Hospitality Management

Volume

30

Issue

2

First page number:

919

Last page number:

938

Abstract

Purpose: The purpose of this paper is to test the relationships between a hotel's design quality and the property's business performance. Design/methodology/approach: Hotel guests' assessments of the design quality of hotels that they recently visited are tested using the design quality indicator (DQI). Business performance is measured using indexed values for each property's occupancy, average daily rate (ADR) and revenue per available room (RevPAR). The data are analyzed using exploratory factor analysis and a variation of a hedonic pricing model. Findings Factor: analysis reduced the DQI instrument to 19 measurement items. Factors that measure navigability and signage positively impact occupancy index. Factors that measure flexible space usage negatively impact the RevPAR and ADR indices. Factors that reflect aesthetic constructs, including Urban & Social Integration and Character & Form, positively impact the RevPAR and ADR indices. Research limitations/implications: The study examines a nationwide sample of guests from two full-service brands of a single multi-brand hotel company. The study provides a parsimonious, validated design measurement instrument and a revised hedonic pricing analysis. Practical implications: Hoteliers can use this technique to assist with resource allocation decisions. Aesthetic elements, including the building's Urban & Social Integration with its surroundings and its Character & Form, lead to higher ADR and RevPAR performance. Managers should ensure a coherent layout and good signage program to drive occupancy. Originality/value: This study offers a technique to measure design quality and a new method of performing a hedonic pricing analysis.

Keywords

Hedonic pricing; Hotel performance; Design quality indicator; Hotel design

Disciplines

Marketing | Tourism and Travel

Language

English


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