The Speed of Change and Performance Risk: Examining the Impacts of IT Spending in the US Hotel Industry

Keywords

IT; IT spending; Performance risk; Speed of change; Trend

Abstract

Purpose: This study aims to investigate the impact of the speed of change (trend) in information technology (IT) expenditures on performance risk indicated by revenue volatility in the US hotel industry.

Design/methodology/approach: To systematically investigate the impacts of IT expenditures on hotel performance risks, this study collects the same store proprietary data of 1,471 hotel properties from CBRE, a leading hotel consulting firm in the USA, from 2011 to 2017, with a total of 10,297 observations.

Findings: Econometric analyses are performed and results indicate a significant and positive impact of the speed of change of IT systems expenditures on the performance risk after comprehensively controlling for confounding factors following prior research.

Originality/value: With the increased importance of IT in day-to-day activities, hospitality business owners have started to quickly adjust their investment in IT infrastructure and superstructure to enhance their business performance. However, their fast-changing expenditures may introduce more risks to their businesses based on the speed–accuracy tradeoff, systems theory and the Schumpeterian Growth Model. This study is one of the pioneer projects that ever assessed the impact of IT expenditure and speed of change on performance risks of hotels.

Publication Date

7-1-2021

Original Citation

Hua, N., Zhang, T., Jahromi, M. F., & DeFranco, A. (2021). The speed of change and performance risk: examining the impacts of IT spending in the US hotel industry. Journal of Hospitality & Tourism Technology, 12(3), 563–579. https://doi.org/10.1108/JHTT-07-2020-0180

Document Type

Paper

Language

English

Source Title

Journal of Hospitality and Tourism Technology

Volume

12

Issue

3

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

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