An Analysis of Hotel-Impact Studies
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This review of 24 impact studies of proposed lodging franchises indicates two general problems. First, impact studies are performed as part of a policy framework that embodies a reactionary approach to assessment of the effects of a new same or similar-brand competitor. Studies are often commissioned only after potentially affected franchisees object to the plan to develop the new franchise location. Second, the assessment methodology is rarely based on quantitative research. That is, impact conclusions too often follow from personal judgment instead of objective analyses of reliable data. The industry may choose to make incremental changes designed to resolve these problems slowly over time. The authors recommend, on the other hand, investing resources to develop a franchise system-growth model that sets goals of maximizing system revenues and franchisee revenues, while maintaining system growth.