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АКТУАЛЬНЫЕ НАУЧНЫЕ ИССЛЕДОВАНИЯ ВУЗОВ ТУРИЗМА И СЕРВИСА
УДК 301.151 DOI: 10.12737/14579
СТРАТЕГИЧЕСКОЕ ПРЕДПРИНИМАТЕЛЬСТВО В ГОСТИНИЧНОЙ ОТРАСЛИ: РОЛЬ СЕТЕВОЙ ПРИНАДЛЕЖНОСТИ1
Мэтс Карлбак, PhD, профессор, школа бизнеса, экономики и права Университета Гётеборга, Гётеборг, Швеция
Целью представленной работы является определение причин того, почему независимые отели решают стать сетевыми и утратить столь ценимую ими ранее независимость. Основываясь на интервью, в ходе которого были опрошены представители двенадцати независимых отелей и пяти гостиничных сетей, активно работающих на шведском рынке, установлено, что независимый статус действительно является важным мотивом, однако такие факторы конкурентоспособности, как техническое оснащение, интернет, использование смартфонов, социальных сетей, продажи и маркетинг, централизация закупок и карты лояльности, обеспечиваются на более высоком уровне сетевыми отелями. Результаты исследования также демонстрируют, что маркетинговые организации и реферальные сети являются предпочтительными вариантами, поскольку их предложения в большей степени соответствуют взглядам на стратегическое предпринимательство, которых придерживаются отельеры. Даже такие агентские аспекты, как права контроля, влияли на желание гостиничных предпринимателей приобретать сетевой статус, поскольку респонденты считали, что их подход к управлению бизнесом является наиболее эффективным. Результаты исследования привносят новую информацию в контексте агентской теории, стратегического предпринимательства и ресурсной концепцией фирмы. Более практически ориентированный итог работы состоит в том, что она позволяет независимым отельерам оценивать текущую предпринимательскую ситуацию и определять, какие варианты представляют наибольшую ценность. Исследование полезно и для гостиничных сетей, поскольку систематизирует те факторы, которые им необходимо учесть, чтобы делать наиболее подходящие предложения для независимых отелей. Особенность методики проведенного в 2010 году исследования состоит в двусоставном интервьюировании отельеров. В первую подгруппу вошли двенадцать частных независимых отелей, отличающихся размерами, категориями и звездностью, а также разной степенью аффилированности, от полностью независимых до сетевых, расположенных на юге Швеции. Вторая группа представлена гостиничными сетями (как сетями в полном смысле, так и менее жесткими по своим рамкам формами организаций) с целью получить представление о том, что они могут предложить независимым отелям и какие меры ограничения и контроля они используют по отношению к своим гостиницам. В качестве центральных результатов интервьюирования можно отметить следующие. Во-первых, получило подтверждение предположение о том, маркетинговые организации и реферальные сети являются наиболее предпочтительной альтернативой для независимых отелей. Частные отельеры высоко ценят свою индивидуальность, способность независимо вести свой гостиничный бизнес, а также обеспечивать уникальные потребительские впечатления гостям. Во-вторых, по крайней мере три из двенадцати независимых отелей считают постоянные издержки аффилиации, взносы и роялти наиболее важной проблемой, нежели первоначальные затраты, необходимые для обеспечения стандартов сети или организации. В то же самое время представители большинства отелей не придают такого большого значения взносам и роялти. В-третьих, решение аффилироваться с сетью во многом диктуется соображениями обеспечения продаж и маркетинговых каналов. В частности, отмечается особая важность карт лояльности, эффективное функционирование которых, как правило, крайне затруднительно обеспечить в рамках одного независимого отеля, и здесь у сети возникает важное стратегическое преимущество. В-четвертых, касательно финансирования роста и экспансии все двенадцать отелей ответили, что не рассматривают акционирование как вариант привлечения капитала,
1 Статья впервые опубликована в Scandinavian Journal of Hospitality and Tourism, Vol. 12, No. 4, 349—372.
поскольку не хотят терять контроль над своим бизнесом, и поэтому готовы использовать либо собственный капитал, либо долговое финансирование. В-пятых, как оказалось, проблема отрицательного отбора в связи с назначением на руководящие должности членов семьи не представляет никакой важности для независимых отельеров. Более того, они убеждены, что, поскольку члены семьи выросли в атмосфере семейного бизнеса, то они лучше понимают суть бизнеса и его культуру. Что же касается возможного привлечения наемных управляющих, то такие идеи не пользуются популярностью у независимых отелей. Владельцы и единоличные управляющие не только опасаются высоких агентских издержек, но часто принципиально не хотят расставаться с контролем, испытывая эмоциональную привязанность с управлению своим гостиничным предприятием. По этим же причинам независимые отели в большинстве случаев не ставят перед собой задачу расширения бизнеса. В-шестых, выяснилось, что понятие BVAA (ценность бренда, связанная с принадлежностью к сети) практически не знакома представителям отрасли и соответствующая методика ее оценки практически не применяется гостиничными сетями. На примере гостиничной отрасли юга Швеции статья демонстрирует необходимость учета широкого множества универсальных факторов, начиная с агентской теории и заканчивая мотивационно-психологическими особенностями поведения собственников, которые влияют на стратегические предпринимательские решения, связанные как с аффиляционными предпочтениями независимых отелей, так и с выстраиванием оптимальной контрактной логики со стороны гостиничных сетей.
Ключевые слова: отрасль гостеприимства, стратегическое предпринимательство, принадлежность к сети, рост, отели, Швеция
STRATEGIC ENTREPRENEURSHIP IN THE HOTEL INDUSTRY: THE ROLE OF CHAIN AFFILIATION2
Mats Carlback, PhD, Professor, School of Business, Economics and Law, [email protected], University of Gothenburg, Gothenburg, Sweden
Ábstract. The aim of this paper is to identify why independent hotels decide to affiliate and give up their highly valued independence. Based on interviews with 12 independently owned hotels and five affiliations active on the Swedish market, it became evident that independence is important, but factors such as development with technical solutions, internet, the use of smart phones, social media, sales and marketing, central purchasing and loyalty cards are difficult to pursue as an independent hotel. The results also showed that marketing organisations and referral chains are the preferred options, as their offerings are more in line with the view of strategic entrepreneurship that the hoteliers expressed. Even agencyrelated aspects such as control rights affected the entrepreneurs' aspiration to affiliate, at the same time as the respondents thought their way of running the business was the most efficient. The results from the research add to the knowledge associated with agency theory, strategic entrepreneurship and resource-based view of the firm. More practically, it gives the independent hoteliers a possibility to assess the current situation and decide what options could be valuable, while the affiliations would be able to better align their offerings to attract new hotels.
Keywords: hospitality industry, strategic entrepreneurship, affiliations, growth, hotels, Sweden
2 The article was first published in Scandinavian Journal of Hospitality and Tourism, Vol. 12, No. 4, 349—372. Republishing of the article is performed in the framework of the project between Telemark University College and Russian State University of Tourism and Service «Education in the field of Sustainable Tourism development in Russia, 2013—16», which is funded by the Norwegian Centre for International Cooperation in Education (SIU).
Introduction
To be or not to be affiliated is a much discussed and debated topic in today's hospitality industry. Both for restaurants and hotels, the presence of chains, affiliations and franchise operations, both smaller and larger, are becoming increasingly dominant.
While the industry for centuries has been dominated by small-scale businesses, often run by a family, it is today evident that this trend is changing (Rush-more, 2001a, 2001b). With the growing importance of different types of affiliations, the market is developing as independent family firms are being incorporated in these larger organisations for reasons such as growth and development, or just to survive in times when the competition is becoming fiercer. As the trend to affiliate in the hospitality sector is increasing, it creates a contradicting situation. On the one hand, the independent family firms are supposed to be the most efficient form of running a company (Abdellatif, Amann, & Jaussaud, 2010; Astrachan, 2010; Jensen & Meckling, 1976) and on the other hand, a large part is affiliating to enhance the performance potential for the future. Why is that? Why are the family firms in the hospitality sector affiliating, and what exactly are they looking for when they choose to give up their freedom and independence to become a part of something much bigger?
Growth is one aspect, development could be another. In many advanced economies, the affiliations are taking a larger part of the market, while many independent businesses find it hard not only to grow and develop, but also just to survive (Scoviak, 2007). Statistical data from the Swedish Hotel and Restaurant Owner's Association (SHR) available at www.shr.se indicate an increase in affiliated hotels at the same time as the affiliated hotels show better key performance indicators such as occupancy, average daily rate (ADR) and revenue per available room (RevPAR) (SHR, 2010). O'Neill and Carlba'ck (2011) find that affiliated hotels experienced better occupancy and net operating income than the independent hotels during a full economic cycle (O'Neill & Carlba'ck, 2011). The affiliations could then be seen as growth and development triggers for hotels with a growth perspective.
On the other hand, if one sees the family-owned hotel as an efficient business format and the owners perceive the business as a lifestyle, the inclusion of affiliations could be more complicated. Different types of entrepreneurs would pursue different things resulting in various strategies. Getz and Petersen (2005) identify different types of entrepreneurs, like «craftsmen», «lifestyle entrepreneurs» and «growth and
profitoriented entrepreneurship» (Getz & Petersen, 2005).
The issue of affiliation could in many ways relate to the mindset of the entrepreneur, based on whether the business owner is a lifestyle entrepreneur or a profit and growthoriented entrepreneur. Webb, Ketchen, and Ireland (2010) describe the process as a balancing act for the entrepreneur. An act of exploiting the opportunities at hand or exploring new possibilities (Webb et al., 2010).
The objective of this paper is to examine the reasons why independent family ownedfirms in the hospitality industry would affiliate and give up the freedom and independence that is often perceived as being so important for entrepreneurs. The aim is also to identify if the chains and affiliations are offering what the hotels want. The theoretical contribution is to develop the ideas around the concepts of strategic entrepreneurship, lifestyle entrepreneurs, agency theory and resource-based views of the firm in a hospitality context. The more practical knowledge is better understanding of growth and development possibilities for the individual hotel. Can I do it myself or, based on my situation, would I be better off in an affiliation? And, in the opposite perspective, how could the affiliations enhance the membership to attract new members and create a better product for current members and therefore strengthen the brand name?
Background
In the literature relating to development and growth in the hospitality industry, the importance of affiliations is a key issue (Anson, 2001; Bailey, 2007; Bailey & Ball, 2006; Damonte, Rompf, Domke, & Bahl, 1997; Imrie & Fyall, 2001). Hence, it could be identified as an important aspect in the discussion of strategic choices for anyone in the business, not only independent hotels, it could also be a pertinent question for affiliated hotels looking to re-brand. In either way, it will be a trade-off between different values important to the owner/manager and the possibilities offered.
As the impact of affiliations is gaining momentum globally, this is also the case in
Sweden, where both the restaurant and the hotel industry are experiencing new companies, both globally famous multinationals and more local chains, all growing organically in the domestic market. As this study is focusing on the Swedish hospitality industry the current situation is best projected by using statistical data from the SHR (Visita) (SHR, 2010). Table 1 illustrates the situation in Sweden, where the chains
are grouped together in three groups, while the marketing organisations or referral chains are presented individually
As a comparison, Table 2 shows the independent hotels for the same period, and it is evident that the chains and affiliations produce better occupancy, ADR and RevPAR in most cases. This factor could partly be explained by the performance, but it could also be due to the fact that most of the chains are established in the major cities and tourist destinations where the possibilities are better — with higher demand and a generally higher price level (Damonte et al., 1997). At the same time, the independent hotels, often under family management, will dominate the market in smaller towns and villages, where the potential is considered too limited or the challenges too demanding for larger firms to invest in. While the RevPAR for the smaller hotels (up to 25 rooms) is EUR25, the chains can report a RevPAR which is exceeding EUR55 for the same period. The independent hotels have an occupancy level of 39.2% for 2009, compared with just over 60% for the chains and 41% for the marketing organisations and referral chains. As an example, an international name like Best Western reports occupancy for their hotels of 49.3%, substantially above several of the other organisations.
For various reasons, the affiliated hotels appear to be doing better on the Swedish market. This is in line with the results O'Neill and Carlba'ck (2011) found in a study of more than 50,000 hotels in the USA. Still, according to statistical figures from Visita
(SHR, 2010), the independent hotel segment is by far the biggest in Sweden, even if we combined the chain hotels and the entities belonging to marketing organisations/ referral chains.
The affiliated hotels produce better results compared with independent hotels, not only in Sweden, but still a large part remains independent, without brand names and the benefits and obligations associated with such. Is this a choice made by the owners/ managers based on other values or are there other factors behind it?
Theoretical Framework
Figure 1 gives an overview of the theoretical discussion that will follow. The questions of affiliation in the hospitality business can be discussed based on several aspects and from various perspectives. In this theoretical review, some of the more common ones are reviewed, but the content is not intended to be exhaustive. There is obviously a cost perspective imbedded in the selection process associated with affiliation. The cost could make the prospects less attractive. Rushmore (2004) has, in his detailed study of the phenomena on the American market, compared the fees applicable in comparison to the cash flow generated and concluded that great caution must be taken and careful calculations must be done in order to establish the feasibility of joining an affiliation, as this is not just a ticket to success. The non-monetary costs (loss of freedom, increased control and administration) could be outweighing the benefits.
Table 1.
Characteristics of hotels in affiliations in Sweden, adapted from SHR (2010) (amounts in Euro)
Affiliation Hotefs Rooms sold Occupancy% 2009 Occupancy% 2008 ADR2009 ADR2008 RevPAR2009 RevPAR2008
Group la 63 3,659,781 59.1 61.6 115 121 68 73
Group 2b 80 5,412,887 65.9 67.0 103 108 67 70
Group 3C 108 4,637,806 56.1 58.2 91 93 51 54
Ditt Hotell 54 777,060 44.8 46.5 81 80 35 36
Sweden Hotels 28 393,|397 42.0 38.3 88 84 37 32
Best Western 68 205,3231 49.3 51.1 94 95 46 23
Svenska Moten 101 258,7285 37.2 40.5 126 128 46 51
Countryside Hotels 44 643,985 38.3 40.8 128 122 48 48
Norrhotell 6 129,387 34.5 37.9 92 88 31 32
aFirst Hotels, Rezidor SAS, Grand Hotel Holdings, Nordic Hotels (with partner), Elites. bScandic Hotels, Sheraton, Rica Hotels (with partner hotel).
Table 2.
Characteristics of independent (non-affiliated) hotels in Sweden (Adapted from SHR, 2010) (amounts in Euro)
No. of rooms Hotels Rooms sold Occupancy% 2009 Occupancy% 2008 ADR2009 ADR2008 RevPAR2009 RevPAR2008
0-25 815 3,295,498 31.2 33.1 82 80 25 26
26-50 350 3,835,231 36.4 37.5 87 87 31 32
51-100 185 4,233,715 41.1 43.1 90 90 37 39
>100 843 4,696,317 48.1 50.5 99 101 47 50
Strategic Entrepreneurship in the Hotel Industry
3.1 Agency Costs and Associated Issues
3.2 Strategic
Entrepreneur-
ship
Figure 1. Illustration of the theoretical overview used in the research project. Agency Theory and Associated Issues
In the hospitality industry, most of the independent firms are family owned, and familyowned firms are often perceived as the most efficient form of enterprise set-up, and will under normal circumstances perform better than non-family businesses (Abdellatif et al., 2010; Astrachan, 2010; Astrachan & Shanker, 2003; Jensen & Meckling, 1976). One valid explanation for this is the agency perspective (Jensen, 1983; Jensen & Meckling, 1976) as the constellation for a family-owned firm per definition will lack many of the issues relating to agency cost and agency problems. Schulze, Lubatkin, Dino, and Buchholtz (2001) challenge this theory as the family business will face other problems and issues that could make it less efficient than non-family firms. The agency costs arise when the interests of the firm's manager are not aligned with those of the firm's owner(s). It could be perks, shrinking and making self-interested decisions (Ang, Cole, & Wuh Lin, 2000). These costs are limited by how well the owner can control the costs and/ or delegate to a third party, such as banks or affiliations, to monitor the spending and decision making of hired managers/external parties.
The agency-related issues could explain several of the reasons behind an establishment's decision to remain independent. In many cases, it could cause conflicting situations when an independent company, possibly family owned, is letting other parties into the business. It could be financing, where the entrepreneur has ideas, or a venture that already exists and the investors have money but no ideas (Hart, 2001).
As the venture capitalists and other investors always look for opportunities in fast growing businesses, the hospitality business could be far more attractive to this type of financing in the days to come. Studies in America show an increasing activity in this kind of developments (Scoviak, 2007). Consequently, the financing part and its related agency problems could be one reason to stay independent, as the mode to affiliation in several cases could be dependent on investments to fulfil the requirements set by the affiliations. By avoiding this scenario, the business owners will retain full control and not let parts of their business into the hands of others.
Even though affiliating could be a step towards growth/development, other important aspects could
surface, more or less all based on the principal agency theory (Astrachan, 2010; Eisenhardt, 1989; Jensen, 1983; Jensen & Meckling, 1976). With all affiliations, this problem will occur, regardless of set-up. The affiliations would require access to information from the member, even in the case of marketing organisations. Franchise chains, on the other hand, will ensure a complete control of most business aspects and in all cases the owner will have to let go of some of the control (Axberg, 1996).
This could cause problems, not only for the business owner, but also for the affiliation, as the flow of information could be asymmetric and decisions based on such information could be biased.
The affiliation options will invariably involve agency costs, which could affect the value of the firm (Jensen & Meckling, 1976), even though affiliations also could add value to the firm, intangible asset value, according to American research (O'Neill & Xiao, 2006). The agency cost should in this case be offset by increased value, created by flying the flag of a well-known brand. American research has pointed this out in several cases, although it is not widely used in other markets (Damonte et al., 1997; O'Neill & Carlback, 2011). As the flag in itself is becoming more important, this relationship becomes more of a focal point. But the more research shows that the previous notion that no agency costs exist in a private, family-run firm has been challenged and therefore must be taken into consideration (Schulze et al., 2001).
They argue that a family-run business may incur agency costs, often comparable to those of non-family firms. The family firm could be affected by cost associated with adverse selection, hiring the wrong staff and with recruitment taking place within the family, poor access to information and other factors affecting the performance.
In relation to agency theory, it is also important to mention the stewardship theory (Astrachan, 2010); while the agency theory assumes individualism, the stewardship theory assumes collectivism. Independent hotels with a business culture more biased to the individualistic approach would view affiliation different from a firm with a more collective culture.
Strategic Entrepreneurship
The term strategic entrepreneurship has been described as: exploring future business domains while exploiting current domains (Webb et al., 2010). This presents a vital and difficult question to most business owners and entrepreneurs. The trade-off between focusing on what one has got, exploiting, and potential possibilities, exploring would be part of any business
owner's agenda. Obviously, the question of affiliation would be part of the equation — to exploit the possibilities and remain independent or to explore new domains with the help from an association.
This would be relevant in the hotel owner's evaluation of strategies for the future. By using strategic entrepreneurship, i.e. to find out the mix between exploration and exploitation, the strategies could be more well-grounded. While most of the research associated with strategic entrepreneurship has been based on publicly traded firms (Ireland & Hitt, 1999; Ireland & Webb, 2007), Webb et al. (2010) apply the discussion to family-owned firms, like the situation would be in the hospitality industry, and suggests the following approach to ensure strategic entrepreneur-ship: (1) developing an appropriate mindset for the firm; (2) finding balance between exploitation and exploration; and (3) continuous innovation.
The first point refers to developing a mindset that will allow a balance between shortand long-term objectives (Webb et al., 2010), i.e. where the independent hotel owner will have to decide what way to go, both in the near future and in the long run. The actual decision of affiliation will be part of the process, as this would entail growth, development and strategic decisions of similar magnitude. As parts of this, Webb et al. (2010) also propose to find a balance between exploitation and exploration.
Would the firm have enough competitive advantage to build on in their current situation or would it be necessary to take new measures to be able to keep this in the future, short and long term? The competitive advantage is an important factor in the hospitality industry and something to build strategies on (Oh & Kim, 2004).
Part of the above-mentioned process would be, for the independent firm, to identify four important dimensions, in order to find out suitable strategies (Webb et al., 2010). It will be important to establish the identity of the firm, i.e. values and tradition, which could hinder any affiliation plans. The question of justice, based on the outcome, will have to be analysed. Are the efforts put in equal to any outcomes? This could be a difficult task for an independent hotel with external staff. Thirdly, nepotism is related to the above and also part of the discussion earlier regarding adverse selection.
If the independent hotel is family owned, it could lead to a certain aspect of nepotism in the company, where the family members are treated differently when it comes to promotions and hiring. Finally, conflict, or conflicting situations that could occur in the firm need to be addressed. While an independent
hotel could be used to conflict handling within its own sphere, new constellations, such as affiliation, could put this issue under new strains. All these dimensions need to be identified in order to develop the mindset and find the balance between exploitation and exploration. The last part of Webb et al.'s (2010) description of strategic entrepreneurship is continuous innovation, something very applicable to the fast moving hospitality business. Not least on the technological front, there seems to be a great evolution closely connected to the use of social media, smart phones and the internet. In this case, it is easy to anticipate that the large, multinational firms have an advantage in the development of innovations, backed by financial muscles and with departments dedicated to such tasks.
A study by Siguaw, Enz, and Namasivayam (2000) shows different adoption of technology with a comparison between chains and independents, where the chains are quicker and more efficient to adopt (Dit-tman, Hesford, & Potter, 2009; Siguaw et al., 2000). On the other hand, there was no significant difference between chains and independent hotels regarding guest and service strategy priority; thus, both affiliated hotels and independent hotels apply the same efforts and techniques as far as service to the guests go (Siguaw et al., 2000). The chains focus a lot more on the issue of employee efficiency, compared with the independent (Ottenbacher & Gnoth, 2005). This is also noted in a British study where focus was put on the fact that independent mid-market hotels are set to face considerable competitive pressures, especially in the UK, where both corporately owned branded hotels and branded budget hotels are strong (Imrie & Fyall, 2001). Imrie and Fyall (2001, p. 64) also conclude that. . . pressure within the wider hotel industry are such that some commentators recommend that operators of independent mid-market hotels either sell to a hotel chain, alter the portfolio characteristics of their product, manufacture economies of scale or simply do nothing and wait for the inevitable.
On the other hand, to do it alone demands adapting to an ever-changing world and business climate with propriety development of know-how, technology and efficiency.
In comparison to other industries, the tourism and hospitality industries have traditionally been relatively slow on the uptake of new information technologies (Christian, 2001). It is even harder for small to medium-sized independent companies to stay on top of the developments. This will not only be limited to these issues, because as the strategic decisions are already made for the independent hotels, i.e. size,
number of rooms, etc., the independent business owners need to aggressively search for new markets and services (Brown & Dev, 1999).
Lifestyle Entrepreneurs
A study in the USA showed that individual hotels produced better profit than did the outlets belonging to various chains (Mieyal Higgins, 2006). According to the survey, the individuals could hold their own business and did not, to the same extent, depend on ups and downs in the economy. A more recent study of more than 50,000 hotels in the USA indicated that affiliated hotels presented better occupancy and profit under economic prosperity as well as in a recession (O'Neill & Carlback, 2011), while the independent showed higher ADR and RevPAR. Based on these findings, it is fair to ask: would there then be any reasons to join an affiliation, or would it be like paying money to give up freedom and independence?
It would all depend on the reason behind every independent business. It could be the goal of building something for the family, which in a study of family businesses was ranked highly (Andersson, Carlsen, & Getz, 2002). The same study also concluded that the top goals for owner-managers were challenge/stimulus, business opportunity, lifestyle and long-term financial gains (Andersson et al., 2002). Hence, there could be stronger forces driving the independent business owner than just money, such as way of life, social life, working together as a family, enjoying work, freedom, etc., which cannot be neglected in this discussion. In the study by Andersson et al., several of the business owners agreed with the statement that «enjoying the job is more important than making lots of money» and they would rather keep the business modest and under control, than too big.
Getz and Petersen (2005) write that it is important to find the motivational factors for independent business owners, in the study based on family-owned firms in the hospitality industry (Getz & Petersen, 2005). The literature, they argue, supports the argument that growth is frequently not desired, nor achieved, among family business owners. It could be that growth is hard to achieve, due to lack of capital, and might be avoided due to higher risks, more work and more debt (Getz & Petersen, 2005).
If business owners are autonomy-oriented, growth could be less valuable than achieving a consistent living (Smith, 1967).
Researchers continuously divide the entrepreneurs or independent business owners in the hospitality industry into different categories like «non-
entrepreneurs», «constrained entrepreneurs» or «true entrepreneurs» (Getz & Petersen, 2005; Shaw & Williams, 1990). The first two enter the business scene for reasons like lifestyle or semiretirement, while true entrepreneurs can find finance outside the family and have innovative management skills.
Resource-based View of the Firm
The decision of affiliation will depend on many factors, of which several have been discussed above. It is also paramount to take a closer look at the resource-based view of the firm (Astrachan, 2010; Astrachan & Shanker, 2003), which argues that firms achieve and maintain a competitive advantage based on a combination of tangible and intangible recourses (Moores, 2009). This is again pertinent to the research about the question of independence versus affiliation. What are the resources that exist in the independent hotels today and what resources could be difficult to muster within this environment?
If the independent hotel would like to retain its competitive advantage or find opportunities to create such an advantage, an internal due diligence process would be required to identify what resources are at hand, what resources could be developed inside the firm or what resources would come with affiliation (Oh & Kim, 2004).
It is possible for the independent hotel to add resources to the current ones, but the question is if this would be feasible, in a financial perspective, or if the prospect of affiliation better would solve such an issue. Another option in the hotel industry, for the firm with limited resources, could be outsourcing (Espino-Rodri'guez & Padro'n-Robaina, 2004; Lamminmaki, 2006). If the hotel owner thinks that the hotel does not have the capabilities to develop a competitive advantage with, for example, Fand B, then such an option could be an alternative (Lamminmaki, 2011).
Method
The study was done in two parts — interviews with 12 privately owned hotels, representing different sizes and degree of affiliations, from the completely independent hotels to affiliated hotels (Table 3). These hotels were all located in the southern part of Sweden, based on logistical reasons, and the interviews were performed during winter 2010. The other part consisted of interviews with the other part — the affiliations — to establish what they had to offer and what level of restrictions and control they would impose on the affiliated businesses. Five organisations were included in the interview and again ranging from the fully fledged chains all the way to the more liberal organisations (Table 3).
Table 3.
Distribution of hotels in the research project and of type of organisation and affiliation.
Participants
Affiliation Type of affiliation
1 Sales and Marketing affiliation
2 Sales and Marketing affiliation
3 Chain with Lease, Franchise, Management Contracts and Own units
4 Chain with Lease, Franchise, Management Contracts and Own units
5 Chain with Lease, Franchise, Management Contracts and Own units
Hotels Rooms Affiliation Location Rating
A 100-150 rooms A Town centre 4 stars
В 150-200 rooms A Town centre 4 stars
С 50-100 rooms M Town centre 3 stars
D 50-100 rooms M Town centre 4 stars
E <50 rooms 1 Town centre 3 stars
F <50 rooms 1 Seaside, village 3 stars
G 100-150 rooms M City centre 4 stars
H 100-150 rooms M City centre 4 stars
1 100-150 rooms 1 Town centre 3 stars
J 100-150 rooms M City centre 4 stars
K. 50-100 rooms 1 Town centre 3 stars
L 50-100 rooms 1 City centre 4 stars
Note: I, independent; M, marketing and sales organisation; A, affiliated.
The sample selection process for the privately owned hotel was based on the intention of having a clear representation of outlets from various cities, regions, categories and star rating in the southern region in Sweden, where the majority of the population lives. This was in many ways restricted due to the reluctance of several business owners to participate in a survey like this, based on «lack of time», «this information is only intended for me and my company». Eventually, the sample was distributed in such a way that it fulfilled the author's ambition of a good selection of representing hotels that could reflect the hotel industry in Sweden. The hotels that opted to participate in the survey did so with the intention of participating fully; hence, a complete set of answers were obtained from the hotel owners and consequently all interviews were valid and could be analysed and constitute part of the results. The respondents were either the owners of the hotels or direct representatives of the owners, i.e. family members.
As for the organisation, seven major players on the Swedish hospitality scene were identified as representing various degrees of rigidity, i.e. from marketing organisations to more or less full franchise organisations. Two of the organisations declined to participate in the survey, stating reasons such as «secret business strategies» and «lack of time» as reasons. The remaining five organisations represented a satisfactory selection, based on some of the most important and dominating players in the market, regarding each and every segment of the affiliation aspect. Therefore, no further approaches were made in order to increase or alternate the selection process. All respondents from the organisations were officers in a position to give proper and well-grounded answers — two CEO's and three sales and marketing directors/business developing directors.
The initial contacts were made via telephone, followed up by a formal e-mail, stating the objectives and goals of the survey. In a second step, every participant was presented with structured questions based on positivism interviews to be able to gather facts for standardised interpretation. The questionnaires were controlled and did not really allow too much of a deviation from the subject and questions at hand. The questions were sent out before the actual interview and, where applicable, saved both time and effort for the interviewee as well as the researcher. By this method, the interviews should then present easily comparable results and hence scrutinised for validity and reliability.
The interviews were mainly conducted in the respective hotel or in the head office/ sales offices of
the participating organisations. Each interview took around 1 h for the hotel owners and 1.5 h for the chains/organisations, and was always done with the author and one representative for the organisation/ business. The questionnaires were filled out during the interview and additional notes duly taken and all interviews transcribed after each and every interview.
Results
A majority of the participating hotels were actually belonging to some kind of organisation, with the less controlled marketing organisations like Countryside Hotels and Sweden Hotels as the most frequent options. There were also two instances in the survey where the hotels actually had left similar organisations, due to inefficiency and «The affiliations do not offer enough activity» as one hotelier put it (hotel E).
The results showed that the marketing organisations or referral chains are the preferred alternative for privately owned hotels. The answers from the owners were here aligned: «I would very much like to keep my individuality, my independence and still be able to run my own business», «I do want the regular guest to recognize themselves and not feel lost because my staff has the same uniform as the staff in the hotel they stayed in last month».
Three of the 12 participating hotels considered the ongoing cost of affiliation, fees and royalties to be the most important issue, rather than the initial cost to fulfil the standards set by the chain or organisation.
If I was looking to affiliate I would probably not be doing as well financially as I expected, but then I would never be able to afford the costs imposed by the bigger chains or franchise organisations to fulfil their requirements. This would clearly break me financially. It is a bit of a catch 22 situation, said hotelier C, who, in financially difficult times, had looked for alternatives to improve business. The majority of the hotels (10 out of 12), on the other side, thought that royalties and fees were less of an issue, even if either the affiliated or the chain hotels not really measured or calculated the actual benefit of being part of a larger organisation. The individuality and independence were the two predominant factors, and the reason to affiliate was much dominated by one issue: the sales and marketing channels.
More or less every hotel in the survey considered the physically added guest, i.e. guest booked in by the chain's central reservation system or via the organisation's loyalty scheme, as the main reason to affiliate. This was also used by organisation 1 as the main point of attracting new member hotels to the organisation.
As we always are on the look-out for new members and the few potential ones we can find are often rather hesitant about the prospect of belonging to a chain or organisation, we try to emphasise on the improved sales and marketing channels, said the president for this organisation, who also stressed that it is rather difficult to find prospective new members due to the fact that «they do not want to be controlled or subjected to at lot of management control systems». A long-term increase in the number of guests staying as a result of the affiliation was of a lesser importance. Partly because it was very hard to measure and partly as it was very hard to establish this fact in relation to other activities that were taking place within the firm.
«The loyalty card is very, very important and the single most important factor in choosing affiliation.
It is not something an independent hotel can create on its own and a very important factor, especially for guests travelling on business», was the comment from the owner of hotel D, who only took part in the affiliation's loyalty scheme, not the rest of the activities. The representative for organisation 4 indicated that potential new hotels always put issues like the loyalty card on top of the agenda and this is something that we easily can offer and put in place for any new hotel. It is also impossible for an individual hotel to develop a loyalty card on its own. This is one benefit with the chain that we can communicate to the hotel owner with ease, while the other tools and control systems are a lot more difficult to sell.
Other factors that could be of importance for an independent hotel owner's decisions to join an affiliation are outlined in Table 4
Table 4.
Rating of important factors for individual hotel owners when considering affiliation
Not important Important Very important
Increased efficiency 12
Management control 12
Finance 12
Marketing 10 2
Sales 12
Loyalty card 12
Brand value 2 8 2
Know how 12
To remain independent, in terms of decision making, was undoubtedly the most important factor for the hotel owners in the survey who did not affiliate or had chosen the less rigid options via referral chains or marketing organisations.
Quotes like
Money is important, but this is more a way of life, I have to do it my way, or rather in the family way, otherwise it is not worth it. I would not give up my freedom for the possibility to join a chain and make some more money (F).
A common factor for all participants in the survey, for both the independent hotels and the organisations and chains, is the notion of efficient development of management and administration tools for future progress. The chains and organisations use this as a marketing and selling proposition, apart from the more tangible factors like loyalty card and brand name. As mentioned above, the hospitality industry is facing a challenging future, but also very promising prospects if one can adapt to the development, i.e. be
aware of and make use of the ongoing development. The representative for organization 1 said that
The management tools and control systems are sensitive issues when talking membership/affiliation as the hoteliers want growth/efficiency/control but not necessarily in the way that the chains and organisations offer them. On the other hand, they cannot develop the versatile and efficient systems themselves, so here we clearly have a conflict in the way we think.
Every single unit in the survey concluded that the difficultly in remaining independent and free from any ties lies in the possibility or rather lack of possibility in following and developing tools and systems for more efficient and more «tuned in» management in the future. The cost of developing and maintaining systems is daunting, but the pure knowhow is also a challenge for the individual hoteliers. The most important factors pointed out by the participants are outlined in Table 5.
Table 5.
The importance of tools and information for owners of independent hotels
Important Not important
Efficient and up-to-date IT systems 4 8
Revenue and yield management systems 1 11
Control systems 3 9
Trends and industry analysis 2 10
Difficulties to become part of a package 4 8
Central purchasing 10 2
Sales and marketing activities on a larger scale 5 7
Strategic alliances 6 6
One of the hotel owners (hotel H) in the survey concluded that The development of systems and tools is crucial and will be even more so in the future as the trends are certainly changing, with more people booking via the internet and the fact that more destinations will be part of more exciting destination packages in the future. The businesses that fail to be part of these emerging trends will face a very hard future indeed.
The same owner also stressed the importance of central purchasing as vital for «being able to keep the profit margins in the future».
Representative of organisation 4 indicated, The tool and systems are being more and more efficient and sophisticated and the difference between those who are using and developing it (chain hotels) and the ones who are not using or developing it (independent hotels) could lead to greater discrepancies in efficiency and performance over the years to come.
The general public's increased travelling has made the guests more conscious and demanding and the acceptance of less professional solutions and offerings will decrease. One of the hotel owners (hotel G) expressed this well, «We would like to offer a homely feeling, without giving the impression that we are home made». «The whole process from the web site, via reservation and all the way to the control systems needs to be efficient, well developed, and easy con-trollable», said the representative for organisation 3.
A major issue for any business, with the intention to grow or expand, is financing and the means of doing this. All 12 participating hotels did not see equity finance as an option.
Any financing for expansion or development should derive from own capital or debt financing. The reason for this was having to give up the control rights of the family or privately owned firm to external investors. This would contradict the idea of running a family business — possibly this could be depending on the culture or mentality in each and every country. Equity
financing was not viewed as an alternative among the participants in the survey. «I want to keep the control over my business and I do not want anyone else telling me what to do», was the view of one of the hotel owners. Another one stated, «To work in partnership or in a constellation with different owners would only lead to trouble and internal disagreements». Structural business models and longterm plans as a base for financing were also something scarce in the community of private hotel owners. The decisions, even important strategic business decisions, were more based on a gut feeling (Alma, 2007) than facts and relevant business calculations.
I like to do things my way, and I always see external interference as a route to problems in the future. I cannot have someone from the outside telling me what to do with my business, it just would not work, said the owner of hotel D, a family business with two hotels in the portfolio and with some plans for expansion. «Expansion and growth will have to be done with money generated within the company, normal debt financing or not at all». Organisations 1 and 2 were not so involved in the finance part for the individual hotels, but the answer from the three other organisations was very much in line with organisation 3's statement:
«We can consider all types of financing, i.e. the best possible one for every single transaction. We are not stuck at all to one standardised formula or solution». Consequently, the type of financing options the affiliations would offer to new members in order to upgrade to required standards is a less favoured option.
One important factor for several of the hoteliers for not expanding or not even contemplating expansion or growth was the time restrictions. On the question if employing a manager would incur unacceptable and unjustifiable costs, the response was almost «No, costs attributable to hiring an external manager is not an issue». The problem perceived by the hote-
liers was much more focused on the «This is my business, only mine and I do not want too much interference in what I do» issue.
One of the participants (hotel H), who had passed the first crucial step and let the control go, as the company had several outlets, did not perceive diminishing control as a problem. The hotelier, who had passed this step, did not view the issue of agency cost when employing managers as a relevant factor.
A major role in the process of choosing a business partner and business form will be based on the notion of agency cost. Very few (2/12) of the participants in the survey recognised any agency cost at present, mainly due to the fact that the interviewees run the businesses themselves and hence did not incur any such cost. On the other hand, 10 out of the 12 identified the potential of the cost, even though it was more attributable to a less efficient running of the business in the hands of an agent than anything else.
I know exactly how to run this business and I know what to buy, what to charge and the number of staff to have on every shift and that is efficiency. It would take an employee many years to develop such a feel for the business as I have gathered over the years, as the owner of hotel F said. This very much summarises the comments from all the participants with the exception of the one hotelier who managed to grow and now was running three hotels.
Concerning shrinking, all the participants agreed that this was not on the agenda and no decisions would be based on this. Hardly any of the hoteliers would see this as an issue of importance. «Shrinking could obviously happen, but that would not go unnoticed for a longer period of time», was the comment from one of the owners (hotel L). Another described the situation like this (hotel K): «I, as the owner, have good control of the business, and any issues of shrinking could only be very limited and with limited effect on the result». Two of the five organisations were aware of this issue, but did not put any weight on the problem. «There might be cases of shrinking and other similar issues, referred to as agency cost, but they are probably negligible or very minor», said the representative of organization 3. And the representative for number 5 indicated: «The control systems and other tools are effectively sorting this out».
The question of adverse selection for the family business was considered neither a problem nor a relevant issue. Nine of the respondents thought that the family members hired for the managerial duties were the best for the task and more qualified or better suited persons were not, generally speaking, to be found externally.
«I think the best suited one will come from within the company. Family members that have grown up with the business, know the business and the culture of the firm», said one of the hoteliers (I), who had members of the family in key positions. Another respondent (C) answered in a similar fashion and added: «If the family member is not the best suited, or indeed is not ready, there would not be a problem to go externally to find that employee».
In this survey, it became very evident that the notion of BVAA (brand value attributable to the affiliation) was neither used nor very well known in the industry. Very few of the chains used this measurement, and those who did, did so to a very limited extent.
For the individual hotels, this measurement was more or less non-existing. But equally interesting was that the interest for, and the perceived need for a formula or possible way to calculate and compare this value was great. «It would be of great value to be able to compute the BVAA in decision making if the alternatives could be evaluated in a more common and broadly used way», said 11 of the 12 hoteliers. One of the representatives of the chains commented (C): «It would be great to be able to put an actual value on the flag we are trying to sell to individual hoteliers».
This leads to the question if the family firms actually are run most efficiently with a family member or if the hoteliers are biased and hence affected by this mentality. This question, raised by Schulze et al., goes beyond the scope of this paper, but it would be worthwhile looking into this issue in further studies. However, in this study, 10 of the 12 participants indicated that they could see no disadvantages with being run as a private, individual or family company, rather the opposite. The notion was accepted by the owners, as they all answered that «their» way of running the business was the most efficient. «Nothing can beat the fact that the owner runs the place», said the owner of hotel C. As this answer was aligned between all interviewees, it clearly marks an interesting situation. The owners of private hotels, and indeed other firms in different branches, see the family-run business as the ultimate business format and that has to be compared against the other sides' (organisations and other interested parties) perspective — that more is needed to produce growth, efficiency and productivity.
Discussion
The results from the study presented above identifies several aspects affecting the decisions to affiliate or not, and also various alternatives if the prospect of affiliating seems to be the preferred option.
For clarification, the points will be presented in the same order as above.
Agency Theory and Associated Issues
Agency cost was one of the perspectives identified as factors behind decisions like affiliation or independence. While the respondents did not naturally accept such problems, the results indicated their existence. The main issue that surfaced was the independent hoteliers' focus on control rights — as the participants did not want to give up their control of the company to another party. Not even if this could lead to growth and increased profit potential. Any financing required, besides normal operating activities, such as refurbishment or maintenance, would have to come from the company's own coffers or possibly debt financing arranged by a bank or other financial institution.
The independent hotel owners/managers would not accept financial solutions from affiliations as this would imply decreased control rights (Tollington, 2002).
Also related to agency issues, the hoteliers were reluctant to let other professionals into the business, such as area managers and affiliation representatives. As they expressed an opinion that they knew the business inside-out, they did not regard external intrusion as something positive, neither for the firm, nor for the owners themselves.
This could again make affiliating more difficult, as any chain or organisation accepting a hotel into its organisation and granting them use of the brand name would have a certain degree of control and a say in strategic decisions. The participants in the research did not accept, as suggested by some researchers (Schulze et al., 2001), that family-owned, independent firms would be subject to unique agency costs — such as adverse selection and problems to keep track with more general developments. On the contrary, they had a unanimous view that the business format they operated under was the most efficient, as the control was more or less total, much in line with earlier findings (Jensen, 1983; Jensen & Meckling, 1976).
Affiliations were in most cases described as a costly option, mainly based on investments needed to fulfil all requirements and less based on the royalty payments, the latter something Rushmore (2001a, 2001b, 2004) identified as a major obstacle. Any decision to affiliate would be scrutinised in terms of cost and possible benefits associated with such an affiliation. The notion that the brand name or flag could add value was not known and generally accepted among the hoteliers in the study. On the other hand, the affiliations seem to, in most cases, create a BVAA
that most of the hoteliers are not aware of. Here is obviously a gap that clearly, if solved, could be advantageous for both the affiliations, the affiliated hotels and the individual hotels.
Strategic Entrepreneurship
Also, the results indicated a clear presence of strategic entrepreneurship among the Swedish hoteliers, similar to what Webb et al. (2010) suggested. The majority had a clear picture of what to exploit from the current situation at the same time as a lot of thought was applied in finding ways of exploring new domains, new ways and new methods. Usually, this was expressed as finding new alternatives for marketing and sales efforts or more technical innovations, or explorations of currently available systems, mainly related to the use of the internet, social media or smart phones. The prevailing mindset among most of the owners was to focus on exploitation of the current unique situation, and enhancing this by adding a certain level of exploration, again in sales and technical development. As most hoteliers expressed a desire to remain free from too exhaustive ties, imposing control and transparency, the issue of marketing organisations and referral chains surfaced as the preferred option for most of the respondents.
The hotel owners in Sweden seem to be very clear of their identity of their firm, both present and future. As most of the hotels were family owned, this was the identity that dominated and was expressed as something to build on for the future — as a contrast to all mainstream, corporate chain hotels dominating several sectors of the market. Even regarding justice, the owners/managers had a clear perception — justice is important, primarily to guests and employees. This could probably be explained to a certain extent by the fact that most of the hotels were run by families and the clientele was to a degree regulars and more or less known by the staff/family. It would also be natural to apply the justice concept within the organisation as the people employed are family dominated and the atmosphere is more family style than corporate. Nepotism, on the other hand, appears to be frequently occurring among the hotels, again based on the large family involvement. As the respondents did not view adverse selection as a problem and preferred to recruit within the family, one could cautiously draw the conclusions that hotels similar to the ones in the survey, often family run, are favouring the family, something that could lead to a conflicting situation in association with affiliation.
The chains would require a more open recruitment process and demand «the best man/woman for
the job». This could in many cases be an obstacle for hotels looking to affiliate, as the family dominance would diminish, something the respondents in the survey did not view as an option. This will go handin-hand with the dimension of conflict. While, much like families at home, the hotels have clear ways of sorting out conflicts in a family-oriented manner, the issue of having an area manager from an affiliation bringing in new situations with potential conflicts could dramatically upset this situation — developed conflict-solving methods could be worth very little when new forces would come in to the equation. The main issue with the strategic entrepreneurship discussion for the hotels in the survey was maintaining innovations. Not only did the respondents stress this as a very difficult task for independent hotels to muster, it also became clear that this is where the chains fill an important gap. The technical innovations are moving fast, so is the use of internet, social media and smart phones, and we have only seen the beginning of Customer Relationship Management (Wu & Li, 2010), Environmental Management Systems (Chan, 2011) and Corporate Social Responsibility (Bohdanowicz & Zientara, 2008).
The international chains can also draw from intelligence gathered on other markets and implement these trends and factors early on in participating outlets, while the independent hotel will often have to follow suit once it is already in place in the market (O'Neill & Mattila, 2010). As the chains and organisations are offering all the above solutions and tools in neat packages, it will be more and more difficult for hotels without unique features (Rushmore, 2001a) to try to cope with these demanding challenges.
With the loyalty card, the respondents in the survey unanimously stated that this is one area where affiliation is almost the only option, and this could be enough to sacrifice all other important issues, such as independence and individuality. It is,
as they say, hard to develop a loyalty card based on one hotel or a couple of hotels. Likewise, it is hard to drive more sophisticated solutions. If the current development with social media, internet, loyalty issues and technical innovations continues, a majority of the hotels will indicate a possible move to affiliation, in one form or another.
Lifestyle Entrepreneurs
Further, as Rushmore (2004) states, an individually owned outlet, which is affiliating, might lose some, if not all, of its independence, and this could be devastating for a family-owned business, where
the business is more «a way of life» than just a money spinner (Rushmore, 2004). Rushmore (2004) suggests other ways to improve business, if that is necessary, without giving up so much independence, where hiring consultants could be one example. However, most of the respondents stated loss of independence as one important issue in the decision process.
The study shows that while the participants are entrepreneurs and looking for growth opportunities, an equally important aspect is the lifestyle, way of life and the possibilities to look after the family, financially and by means of offering employment. This is also in line with previous research where the goals for family-dominated tourism firms are presented (An-dersson et al., 2002).
The results also support Andersson et al.'s (2002) findings that running these hotels is about so much more than money. The participants would not give up their independence and work satisfaction to make much more money. A possible affiliation must not compromise on this and again, this could hinder any potential affiliation, at least with the more regular chains. Some of the marketing organisations could partly offer independence to a more or a lesser degree, while still offering some of the advantages sought after by the growth-striving hoteliers.
As Getz and Petersen (2005) write, it is important to find the motivational factors for independent business owners, and in this study limited growth is desired, but not easily achieved. Consistently with that, the hoteliers in the survey find growth difficult to achieve, mainly due to lack of capital, but they do not avoid it due to higher risks, more work and more debt (Getz & Petersen, 2005), as growth is on the agenda. This growth should on the other hand be achieved with own finance or regular debt finance, not equity finance as will be described later. The hoteliers in the survey could best be described as autonomy-oriented, as growth came second to independence at the same time as they fit the definition of «true entrepreneurs» and not the other groups associated with relaxed lifestyle and semi-retirement.
Resource-Based View of the Firm
Finally, a majority of the respondents in the survey stated that they possessed the resources within the company, necessary to achieve profitability and also growth and development, mentioned in previous research (Astrachan, 2010; Astrachan & Shanker, 2003). But in two distinct cases, innovation and sales and marketing (mainly electronically), they appeared to lack enough internal resources to keep phase with the branch in general.
Even if they consider themselves to have a competitive advantage based on the fact that they are independent, and not mainstreamed, they accept that several factors could be hard to tackle for a small, often family-run company. Then the competitive advantage based on the fact that they are independent, and not mainstreamed, they accept that several factors could be hard to tackle for a small, often family-run company. Then the competitive advantage could be turned into a competitive disadvantage — when the independent firm lacking basic functions often related to development within social media, internet marketing and the use of smart phones.
The independent hotel also finds it very difficult to stay on top of more traditional sales and marketing activities such as driving loyalty through the use of loyalty cards and the possibilities associated with the data bases collected from such cards.
Even management control systems and efficient strategic decision making could be a challenge for the smaller, independent hotel, but such tools were less sought after.
Limitations and Suggestions for Further Research
The results from the study should, like all research, be interpreted with caution. Although some of the major theoretical perspectives have been empirically tested, the results are based on hotels in one country. And even if the results clearly point in certain directions, it could only be anticipated that the findings here are applicable in other markets, even if an educated guess would be that the results could be used with good results on similar markets, i.e. smaller, advance economies. The results become more interesting, based on the fact that the part of the Swedish hotel sector that is affiliated is, percentage wise, relatively large, compared with other European markets, even though the results indicate a reluctance to affiliate. A similar study in other advanced markets could therefore indicate an even stronger reluctance under current circumstances.
The results present a foundational building block, both in theory and in practical application, which could be used to further build the knowledge base associated with these theoretical perspectives in a hotel context and its effect of affiliating. In this study, the important factors associated with affiliating were identified on the Swedish market, which is an important market, but not representing the global hotel market.
Further similar studies, with focus on other markets and regions, would produce more valid results for different markets or regions.
It could also be the case that different affiliations would work better on certain markets, while others would not be successful in some markets, due to various circumstances.
Would the cultural values associated with the affiliation and the brand it is representing affect the performance and should these factors be taken into consideration when selecting an affiliation? A study into the transparent and hidden values of the different affiliations and their suitability to various markets could add valuable knowledge and enhance the strategic decision making. A longitudinal study of hotels that have made the transformation from independence to affiliation could further strengthen the argumentation related to what alternatives would be the best in different cases.
Based on the results from this study and with the intention to further develop the knowledge about strategic entrepreneurship associated with affiliations, it would be advantageous to, in more detail, study the role of consortium, marketing organisations and referral chains, as they seem to be the preferred option for independent hotels seeking possibilities for competitive advantage. One aspect would be to look at to what extent the fees and royalties payable to a marketing organisation matches the benefits offered. Another would be the question as to what extent all members in a marketing organisation are pulling their weight, or is it a case of some «locomotives» moving the brand forward and a lot of «wagons» simply following and ripping the benefits produced? Further, it would be advantageous to analyse more extensively the factors driving the value of the brand for the affiliation, in terms of attributes that create a stronger and more valuable brand name and consequently affiliation.
As affiliations are, and probably will be, an important part of the business strategies in the hospitality business, it could be beneficial to measure and be able to communicate the actual BVAA, in a straightforward and presentable way. The current perception that privately owned family firms may be the most efficient way to run a business could be tested empirically. The result of this research clearly shows that the perception among the business owners themselves supports earlier research that it is one of the most efficient ways: Therefore, it would be very interesting to challenge this, based on the more resent American research (Schulze et al., 2001).
Conclusions and Managerial Applications
The results from this study have advanced the knowledge on how various theoretical ideas are affecting the hospitality business in an affiliation con-
text. The agency-related issues are affecting the decision to affiliate, in a sublime way — independence and control rights are of paramount importance. And both strategic entrepreneurship and resource-based view of the firm are closely connected to the individual hotelier's ability to take the right strategic decision. It is clearly evident that all these theoretical ideas are, and will, affect the hotel industry.
Even though independence is more important than growth, the question of affiliation is always on the agenda for independent hoteliers in Sweden — to join, leave or possibly change flags. By using the findings presented here, the implications associated with affiliation are easier to understand and consequently to deal with. The factor of independence versus the benefits of affiliating would have to be dealt with on an individual hotel owner basis, where the importance of agency issues, financing, available resources, preferred strategies and personal or family-related issues will have to be evaluated for their own merits. It is a matter of finding the right balance between personal values and more business-related strategies. As the results indicate a preference for independences, the individual hotel owner with ambitions must go through the factors presented here and draw conclusions based on the findings. As most of the current literature and research point in a direction where the larger companies will grow in importance, it will be even more important for any hotel owner to know and act on issues related to this factor. Large organisations with muscles have an advantage to develop a loyalty card, sales and marketing channels, managerial tools and systems, something the independent hotelier will not be able to do. But this will come at a price — less independence and a fee and royalty structure that will not be acceptable for all, and in many cases rather
complex and complicated to compute and understand in advance. The results show that the entrepreneur must identify ambitions and mind set and then choose strategies based on this analysis. What is the preferred option for one, might not suit the next one.
The results show that the solution might be marketing organisations and referral chains, where they could get assistance with some of these factors, without losing too much of their sought after independence. Most of them are after all in the business for other reasons than growth, development and money. With a better understanding, based on the results presented herein, the strategic decision-making process could be enhanced and lead to better decisions being taken. To what extent are we exploiting our current competitive advantage and what would be the best way to explore new alternatives?
This could possibly be achieved with affiliation, but then some of the independence could be lost, which is perceived as important, and control rights could be jeopardised.
From the affiliation's perspective, it would be advantageous to understand what the independent hotels want — i.e. to keep the independence and control, at the same time as they need help in many aspects of development. It is therefore paramount that current affiliations pay attention to these facts, otherwise new and innovative affiliations will take the opportunity to enter the market based on this information. With a deeper understanding of the underlying factors affecting the hotel owners' decisions to affiliate or not, and with whom, the affiliations can tune in their offerings to suit a broader range of business owners. One way could be to reduce certain aspects, such as control, and strengthen others, such as the loyalty card offered.
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