Hotel chains focus on hospitality in the hunt for new destinations

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By Claus Rosenkrantz Hansen

International hotel chains are a great advantage for the nation because they create new jobs and stimulate local hotels to develop new services. Their mere presence and brand qualities draw not just tourists but also international conferences and conventions.

As a result, enticing international hotel chains to Denmark is of great interest and cities like Copenhagen would like to make themselves attractive to large hotels. But what do large international hotel chains consider important when looking to expand their hotel portfolio to a new destination?

The simple answer is revenue. If a hotel chain believes it can earn more money in destination X in comparison to destination Y, then destination X will win. Identifying the local factors that affect whether or not a hotel chain sees moneymaking potential and why it selects X instead of Y is more difficult.

In the article “Attracting international hotels: Locational factors that matter most”, three researchers addressed the above question.

One of the researchers behind the study, Associate Professor Alexander Josiassen, CBS Department of Marketing, states:

“Our article examines the local factors that have the greatest influence on hotel chains concerning their choice of destination. Our findings show that factors such as hospitality and infrastructure matter the most when it comes to attracting international hotels. We can also see that the crime rate has the largest negative impact.”

23 issues examined
With a wealth of factors in their sights, the researchers examined 23 different issues.

“In order to determine which local factors possibly played a role, we interviewed marketing executives from well-known international hotels such as JW Marriott, Hyatt and Best Western. We asked them what they took into consideration when choosing a new destination and their responses resulted in a list of 23 different factors,” explains Josiassen.

In order to rank the items on the list and to find out which ones had the greatest impact, the three researchers went a step further than previous research in this area, which exclusively ordered the factors based on interviews. The findings in the current study, however, are anchored in analyses made using hard data the researchers collected.

“One of the biggest differences between our study and previous studies is that we’ve included data from tourist destinations worldwide. The analyses carried out based on these data allow us to conclude that hospitality is the most important factor. This means that our study is the first of its kind to actually measure how everything fits together. And that’s a significant step forward compared to previous studies based on the opinions of just a few people,” contends Josiassen. 

Optimize use of resources
Josiassen believes that the findings should help show how resources ought to be distributed in the tourist industry.

With the article in hand, tourist towns can more easily prioritise what to focus on if they want to pave the way for new international hotels.

“Our analyses show that resources are best spent on measures that improve factors at the top of the list, including hospitality. Doing so is a complex, difficult task, but if you succeed, you position yourself better in the battle to draw new international hotels,” concludes Josiassen.