Center for Hospitality Research Publications

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https://hdl.handle.net/1813/70530

The Center for Hospitality Research (CHR) is the leading source for quality research on and for the hospitality industry. It creates new knowledge—and shares that knowledge to power hospitality forward. The CHR works with business leaders to develop new ideas, theories, and models that improve strategic, managerial, and operating practices. These insights are captured in research reports and industry tools that are available online at no cost. Thousands of academic and business leaders worldwide tap into this research stream. An active knowledge-sharing program further distributes the center’s work around the globe.

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Consolidating the $50 Billion U.S. Short-term Rental Market
Lólis, Philip; Scott, Mike; Dickinson, Clay (2023-08-02)
Over 72 percent of all hotels in the United States are affiliated with large brands like Marriott, Hilton, IHG, and Hyatt. In contrast, the largest operator in the short-term rental (STR) market, Vacasa, manages less than 1 percent of the total market. With around $53.5 billion in gross booking value, or about 25 percent of the entire U.S. lodging industry, the STR market presents an enticing consolidation opportunity.
Implementation vs. Rewards of Tech Investment
The Center for Hospitality Research (CHR) (2023-06-26)
Insights from more than 200 hospitality decision-makers for technology solutions including: data security management, customer satisfaction, approaches to legacy technology, and investment in new solutions.
The Next 100 Years: Hospitality Guests of Tomorrow
Dev, Chekitan (2023-06-12)
In this report, we present a panel discussion in which we look ahead to where the hotel and travel industry will be in the next 100 years. We chose this topic in part because 1922 was the year when the American Hotel Association (as it was then known) encouraged Cornell University to create a “hotel program,” which had the goal of helping to professionalize an industry that was experiencing the growth and expansion of the first hotel chains (notably, the Hotels Statler). The newly created hotel program rapidly outgrew its initial home of Cornell’s College of Home Economics and in the intervening century became Cornell’s Peter and Stephanie Nolan School of Hotel Administration.
Hotel Sustainability Benchmarking Index 2023
Ricaurte, Eric; Jagarajan, Rehmaashini (2023-06-06)
For the ninth consecutive year, the annual Cornell Hotel Sustainability Benchmarking research reveals a general decrease in energy and water usage among the participating hotels. The decrease is largely associated with the pandemic which shook the world and granted no exception to the hospitality industry. For this reason, low occupancy rates and hotel closures are major contributors to the decreased energy and water consumption reported, as compared to the 2019 calendar year data set. A total of 25,576 hotels from 31 international hotel groups took part by providing data on their water and energy use for the calendar year of 2021. Of the total, around 50 percent of the data set comes from hotels in the United States. The data do not account for individual hotel amenities in terms of energy or water usage, but they do allow hoteliers and potential visitors to see benchmarks for different hotel segments and locations. Despite the challenges faced by the industry, the study continues to present a strong picture of the industry’s performance over the years. To provide a more robust and useful data set of the industry for benchmarking and to promote improvements in energy, water, and carbon performance, the authors encourage additional hotels and hotel chains to take part in CHSB2024, especially those in the lower tier segments, which are not as strongly represented.
Mixed Signals Portend Greater Uncertainty Ahead
Liu, Crocker; Nowak, Adam; White, Robert Jr. (2023-04-14)
Although hotels showed continued positive price momentum in all regions from the prior year (year over year), prices faltered in some regions from the prior quarter, especially in the Mid-Atlantic and to a lesser extent in the South Atlantic regions. Hotels in non-gateway cities continued to outperform hotels in gateway cities, albeit the gain was relatively small compared to prior periods. The transaction volume for both large hotels and small hotels declined again this quarter as well as relative to the previous year. Based on our moving averages, a buying opportunity currently exists for both large and small hotels, although it might pay to continue to keep the gunpowder dry. Not surprisingly, the volume of hotel loan originations fell, while the interest rate on hotel loans continued to rise. Although lenders have reduced the amount of additional compensation they require to make hotel loans relative to other commercial real estate loans (i.e., hotel risk assessment), Wall Street’s valuation of REITs reveals an expectation of higher relative risk for hotels. Since the borrowing costs continue to exceed the return on hotels, economic profit and shareholder value added remain negative, indicating that anticipated future price gains are the primary driver of hotel investment performance. Looking towards the next quarter, our leading indicators of hotel price performance indicate that we should expect price momentum to moderate or decline for both large and small hotels.
Barbados Tourism: Repositioning A Struggling Country Brand
Dev, Chekitan; Stroock, Laure Mougeot (2023-04-06)
With a theme of “Sea. Sun. Sand.,” the Caribbean island nation of Barbados relied on its tourism industry as a source of foreign exchange. Its official language was English, with laws and a cultural background based on that of the United Kingdom. Not surprisingly, most visitors came from the U.K., Canada, and the United States. However, the recent Covid pandemic interrupted Barbados’s tourism market, and the industry continued to struggle. Although the industry saw gradual improvement in recent times, the nation needed to address several challenges. As a starting point, its “3S” market position was being matched by other, larger destinations. In a promising step, the government invested heavily in the tourism industry, but that investment had yet to pay off. Moreover, the industry faced foreign-exchange leakage, as operators from other countries “discovered” Barbados as an attractive destination and constructed hotels that channeled at least some of the tourism receipts off the island. All-inclusive resorts and visits by cruise liners augmented the issue of diminished per-capita tourism spending. The island was also subject to any disturbances in its chief markets (as, for example, the pandemic), and costs were driven up by the increased value of the U.S. dollar, to which the Barbadian dollar was pegged. To encourage more stay-over tourism, the island’s tourism officials promoted Barbados’s other appeals, such as its considerable historical role in the history of Britain and North America, eco-tourism, and local festivals, such as Crop Over, which celebrated the end of the sugar harvest. Thus, the question became one of what Barbados needed to do to ensure the success of its tourism industry.
Music Refrain: One More Time
Liu, Crocker; Nowak, Adam; White, Robert Jr. (2023-02-01)
The price of hotels showed strength in all regions except the South Atlantic this quarter, with all regions except New England experiencing double-digit growth year over year. Hotels in non-gateway cities posted higher quarterly and yearly gains relative to gateway cities, with the non-gateway hotels’ prices increasing 4 percent for the quarter, compared to 2 percent for gateway properties. On a year-to-year basis, non-gateway hotels recorded a 19-percent increase versus 3 percent for gateway properties. However, regardless of price changes, the transaction volume for all hotels (that is, both large hotels and small hotels) fell this quarter. With regard to price, small hotels appear to be undervalued (while large hotels range from correctly priced to overvalued) based on both a 3-year and a 5-year moving average. The cost of hotel debt financing continued to rise this quarter, as well as year over year. Lenders are requiring relatively more compensation for hotel loans relative to the 10-year risk-free rate due to increased perceived risk. As in the previous period (Q3 of 2022), our economic-value-added and shareholder-value-added metrics continue to indicate that the cost of borrowing exceeds the return for hotels. Looking toward the next quarter (i.e., near term), our leading indicators of hotel price performance indicate that we should expect slower or declining price momentum for larger hotels but not necessarily for smaller hotels. This is volume 11, issue 4 of the hotel indices series.
Hotel Il San Pietro di Positano: Strengthening an Extraordinary Independent Brand
Dev, Chekitan; Stroock, Laure Mougeot (2022-11-02)
It was mid-June 2022 and Vito and Carlo Cinque, two brothers at the helm of the world-renowned Italian 5-star hotel Il San Pietro (ISP) since 1996, had reasons to rejoice. Located in Positano on the Amalfi Coast, south of Naples, their 56-room iconic property was enjoying its best year, as unprecedented numbers of pandemic-exhausted travelers were flocking again to Positano. Charging an average rate of €1,882 each night for a room, the hotel boasted a 99.9% occupancy rate1 and was fully booked until mid-October. This was in stark contrast with the preceding two years during the Covid-19 pandemic, when ISP struggled to keep staff onboard and attract guests as Italy endured a catastrophic drop in tourism.
Annual Report FY 2021-2022
Center for Hospitality Research (2022-10-31)
2021-2022 Annual Report published by the staff of the Center for Hospitality Research (CHR) at Cornell University's School of Hotel Administration.
Long Small Hotels, Short Large Hotels
Liu, Crocker; Nowak, Adam; White, Robert Jr. (2022-10-19)
The price of hotels showed particular strength in the Mid-Atlantic, Pacific, and West South Central regions, while other regions experienced positive growth albeit at a slower rate relative to the previous period. Hotels in non-gateway cities posted higher quarterly gains relative to those in gateway cities, increasing 2 percent compared to a drop of 4 percent for gateway hotels. With regard to yearly prices, hotels in non-gateway cities increased 21 percent as compared to a rise of 1 percent in gateway cities. The transaction volume on all hotel transactions (both large hotels and small hotels combined) mimicked the previous quarter’s sales volume. The prices of small hotels appear undervalued (while those of large hotels appear overvalued), based on both 3-year and 5-year moving averages. Mortgage volume for hotels fell slightly for the most recent quarter, while the the cost of hotel debt financing has continued to rise quarter to quarter, as well as year over year. In short, lenders are requiring relatively more compensation for hotel loans relative to the 10-year risk-free rate due to increased perceived risk. The rise in borrowing cost will dampen enthusiasm for undervalued hotel properties, since our EVA and SVA metrics continue to indicate that the cost of borrowing exceeds the return for hotels. Looking toward the next quarter, our near-term leading indicators of hotel price performance indicate that we should expect slower or declining price momentum for large hotels but not necessarily for small hotels.
Roundtable Recap: Driving Operational Excellence Through Analytics
Scher, Emma; McGuire, Kelly (2022-09-15)
The analytics function in hotels is still relatively new. While some hospitality companies began to build out an analytics function earlier, it has only been in the last ten to fifteen years that the majority of industry players have made investments in people and technology to support broader and deeper use of analytics in their organizations. Through the years, industry functions like sales, marketing and revenue management have come together to drive awareness and education across their disciplines, but there has yet to be a similar forum for hospitality industry analytics leaders.
Impact of Occupancy Taxes on the Sharing Economy
Wrolstad, Jay; Cui, Yao; Davis, Andrew (2022-07-27)
Efforts to collect occupancy taxes on Airbnb lodging listings, designed by public policy makers to regulate the homesharing market, have put individual hosts at a distinct disadvantage compared to commercial listings, rather than leveling the playing field as intended, new research shows.
Heading into Economic Headwinds
Liu, Crocker; Nowak, Adam; White, Robert Jr (2022-07-26)
The price of hotels rose in all regions except the Mid-Atlantic this quarter. Hotel prices in the Mountain and South Atlantic regions reached new statistical highs, while hotel prices in the Pacific region continued to remain above their statistical high. Hotels in non-gateway cities posted higher quarterly gains relative to gateway cities, as non-gateway prices increased 5 percent, compared to 3 percent for hotels in gateway cities. The transaction volume on all hotel transactions ((both large hotels and small hotels combined) surged 27 percent this quarter (61% year over year). Median prices also rose this quarter for both large and small hotels as well as hotels in non-gateway cities while hotels in gateway cities declined 23 percent. The prices of large and small hotels appear to be undervalued based on moving averages. However, the cost of hotel debt financing rose sharply this quarter, as well as year over year. Lenders are requiring relatively more compensation for hotel loans relative to other commercial real estate, and to the 10-year risk-free rate due to increased perceived risk. The rise in borrowing cost will dampen enthusiasm for undervalued hotel properties, since our EVA and SVA metrics indicate that the cost of borrowing exceeds the return for hotels.
Groundedness: Connecting Consumers with Place, People, and Past
Wrolstad, Jay (2022-04-19)
Our fast-paced world keeps picking up speed, with digitization, globalization and mobility recognized widely as signs of progress and innovation—yet for many there is a growing desire to take a step back, catch their breath and establish some emotional roots for a measure of safety and stability. Consequently, businesses that deliver products and services that address this need to be grounded may have a leg up on the competition, new research shows.
Beware the Ides of March
Liu, Crocker; Nowak, Adam; White, Robert Jr (2022-04-18)
The price of large hotels fell by .25 percent, while that of smaller hotels increased 3.3 percent this quarter. On a regional basis, the MidAtlantic had the best quarterly gains, with the Pacific region also doing well, while the Midwest suffered price declines. Hotels in both gateway and non-gateway cities continue to post positive performance, with greater gains for hotels in non-gateway cities. Transaction volume declined this quarter (from the previous quarter), although it was still stronger relative to the same quarter last year. Our moving average trendlines indicate that both large and small hotels are priced to buy. Large hotels continue to decline, while smaller hotels are rising, based on our standardized unexpected price (SUP) performance metric. In terms of financing hotels, mortgage-financing volume continued to rise, although the cost of financing hotels rose sharply this quarter. The relative risk premium has remained stationary this quarter, although the hotel delinquency rate has declined along with the riskiness of hotels compared to other major types of commercial real estate. Hotel deals continue to look profitable based on our economic value added (EVA) and shareholder value added (SVA) metrics, although they are nearing breakeven. Looking toward the next quarter, our leading indicators of hotel price performance indicate that in the near term we should expect slower or declining price momentum for both large and small hotels.
12th Annual Sustainability Roundtable Highlights
Adalja, Aaron; Varney, Jeanne (2022-03-22)
The Center for Hospitality Research at the Cornell Peter and Stephanie Nolan School of Hotel Administration in the Cornell SC Johnson College of Business at hosted its 12th annual Sustainability Roundtable in the fall with the beautiful colors of the season flourishing in Ithaca. Although everyone was not able to gather in Ithaca again this year, holding the event in a virtual format again allowed participants from around the world to dial in to reconnect and engage in meaningful discussions pertaining to pressing sustainability issues.
Shifting Loyalties: Where Has All the Love Gone?
Corda, Carolyn (2022-03-16)
It’s no secret that the consumers’ connection to their preferred brand has frayed during the pandemic-driven downturn in travel. PwC conducted a survey in 2020 which found that 41% of consumers are likely to switch hotels, while some 40% are undecided, leaving a small minority locked into a preferred brand (Glick and Baker 2020). A 2021 survey from Accenture reported that 45% of consumers are considering shifting some or all of their spending away from current travel providers (Curtis, Quiring, Theofilou, and Bjornsjo 2021). This research and similar studies have focused on travelers overall, most of whom have significantly curtailed their traveling since March 2020. But what about those that have continued to travel at the same relative rate? Have they, too, lost that loving feeling?
Converging Towards Normalcy
Liu, Crocker; Nowak, Adam; White, Robert Jr (2022-01-20)
Hotel prices continue to converge toward pre-pandemic levels. Gains posted were smaller relative to the previous quarter but higher year over year. Hotels in both gateway and non-gateway cities continue to exhibit positive performance, with hotels in non-gateway cities posting greater gains. Transaction volume continued strong for large and small hotels quarter over quarter and year over year, although the increase in volume was smaller in this instance than was the increase in the prior period. Our moving average trendlines indicate that large hotels are priced to buy, while small hotels are priced at market (priced fairly). Large hotels declined from their statistical high set last quarter, based on our standardized unexpected price (SUP) performance metric. In terms of financing hotels, mortgage financing volume continued to rise, as the cost of financing hotels slightly diminished this quarter. Among factors that have contributed to this situation are the relative risk premium, which has remained stationary this quarter, and a continued decline in the hotel delinquency rate. Hotel deals continue to look profitable, based on our economic value added (EVA) and shareholder value added (SVA) metrics. Looking toward the next quarter, our leading indicators of hotel price performance indicate that we should expect slower or declining price momentum for larger hotels but positive price gains for smaller hotels.
2020-2021 Year in Review
Center for Hospitality Research (2021-11-01)
2020-2021 Annual Review published by the staff of the Center for Hospitality Research (CHR) at Cornell University's School of Hotel Administration.
Understanding Human Resource Practices and Outcomes in Franchise Businesses
Lakhani, Tashlin (2021-11-01)
Franchise businesses are an essential and growing part of the U.S. economy, accounting for nearly 800,000 establishments, 9 million jobs, and $800 billion in output annually. The importance of franchising is particularly evident in hospitality. Hotel and restaurant companies often use franchising to expand faster than would be possible through company ownership alone. Today, food and hospitality account for 65% of employment in franchise businesses. However, we know very little about human resource management in franchises. This is noteworthy because a large body of empirical research has shown that investments in human resource (HR) practices such as employee selection, training, compensation, internal promotions, and employee discretion improve organizational performance including outcomes such as employee turnover, sales, and customer satisfaction.

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