Financial Characteristics and Outperformance: Evidence of a Contemporary Framework From the US Lodging Industry


outperformance, financial characteristics, advertising, business performance, financial performance


Purpose– The paper aims to provide empirical evidence that certain financial characteristics are critical for lodging firms to earn a higher profit. Further, it proposes, perhaps more importantly, a robust empirical framework for identifying outperformance in profitability, which has been barely studied in the lodging industry.

Design/methodology/approach– The paper employed logit models, under the framework of comparative advantage theory, to explore the relationships between firm financial characteristics and outperformance from a financial perspective.

Findings– This study, for the first time, provides systematic empirical evidence on how to identify lodging firms that outperform their competitors over time. From a practical standpoint, owners and managers should use industry medians to benchmark financial performance, focusing on factors such as leverage, book to market, asset turnover, and firm size to ensure financial performance leadership among lodging firms. Moreover, echoing previous research, a franchise appears to help differentiate an outperforming firm from its competitors in a positive way.

Research limitations/implications– Because of the chosen research framework, the study results need to be interpreted with caution. Specific suggestions appear in the section of limitations and future research.

Practical implications– The paper includes implications of general guidelines to identify financial characteristics that differentiate outperforming firms from their competitors as well as some specific action plans for investors, practitioners, and researchers to consider.

Originality/value– This paper is the first one that provides systematic empirical evidence on how to identify lodging firms that outperform their competitors over time, thus shedding lights on what financial characteristics lodging firms should keep a close eye on for a better future.

Publication Date


Original Citation

Hua, N. & Nusair, K., & Upneja, A. (2012)."Financial characteristics and outperformance: Evidence from the lodging industry." International Journal of Contemporary Hospitality Management, 24(4), 574-593.

Number of Pages


Document Type




Source Title

International Journal of Contemporary Hospitality Management






Rosen College of Hospitality Management


Rosen College of Hospitality Management

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