Corporate effects and core competencies: The influence of corporate strategies on the performance of hotels.

The purpose of this empirical study is to examine the corporate effects in the lodging industry from a hotel owner's perspective. Linking the concepts of corporate strategy and core competence, eight corporate strategies are proposed relating to hotel property financial performance and contributing to hotel owner's core competence. Based on a three-year sample provided by Smith Travel Research, four hypotheses are tested with regard to the effects of hotel owner's corporate strategies and core competencies. The findings strongly support the existence of corporate effects and the influences of corporate strategies on hotel financial performance. Based on the relative importance of the eight strategies, a hotel owner's expertise in implementing superior strategies regarding segment, brand, operator, location (i.e., MSA), brand diversification, and location (i.e., MSA) specialization are identified as the core competencies of the best-performing owners. The results reveal that a hotel owner's core competencies may influence its hotels differently. This study also suggests that the collective influence of multiple corporate strategies may have a strong impact on a hotel's financial performance.