THE APPLICATION OF MARKETING STRATEGIES IN HOTELS AND BRAND POLICY: IMPLEMENTATION GAPS, CHANNEL DEPENDENCE AND THE NET VALUE OF BRAND AFFILIATION

Abstract

Hotels in Uzbekistan face a choice of brand policy, between remaining independent, joining a consortium or soft brand, taking a franchise or signing a management contract, and a choice of which marketing tools to adopt. This article relates both choices to performance in a sample of 140 hotels in five cities, measuring volume (occupancy) and yield (an ADR index relative to hotels of the same city and class) separately and following the channel through which rooms are sold. Affiliated hotels apply far more of the marketing toolkit: 76 per cent use revenue management against 40 per cent of independents, 76 per cent run a loyalty programme against 19 per cent, and they score 61.9 against 34.5 on a marketing implementation index introduced here (Welch t = 6.07). They sell 35.8 per cent of room nights through online travel agencies against 59.5 per cent (t = minus 12.89). Affiliation does not raise occupancy as such: affiliated and independent hotels fill 54.5 and 53.9 per cent of rooms. It substitutes for intermediaries. Holding the OTA share fixed, affiliation is associated with 4.15 more points of occupancy (t = 2.05), and affiliation and loyalty programmes are associated with OTA shares 14.7 and 10.9 points lower. The yield premium of brands runs through the same channel: the ADR premium of managed hotels, 18.26 index points, falls to 3.69 once the OTA share is held fixed. Digital marketing is associated with occupancy on its own, but it is also associated with greater OTA dependence (0.41 points of OTA share per point of digital budget share), and its association with occupancy weakens by 29 per cent and loses significance with controls. The revenue-management association with ADR, 14.54 points on its own, falls by 44 per cent and loses significance once brand policy and channel enter. After OTA commissions and brand fees, the RevPAR premium of affiliated hotels falls from 19.9 to 14.4 per cent, and to 9.1 per cent if fees are half as large again as assumed. Among strategy types, hotels combining revenue management with restrained promotion outperform hotels that promote heavily.