The Other Side of Technology Adoption: Examining the Relationships Between e-Commerce Expenses and Hotel Performance

Keywords

IT, E-commerce, rooms revenue, gross operating profit, hotel performance

Abstract

As information technology (IT) increasingly permeates all aspects of the contemporary society, hotels have spent millions of dollars to deploy electronic commerce (e-commerce) tools and develop appropriate strategies to attract and retain guests. Yet, while the literature reflects the drivers of adopting certain e-commerce tools, it does not provide a conclusive answer regarding the effectiveness of e-commerce expenditures. Specifically, it is unclear whether such expenditures affect performance in terms of revenue and gross operating profit, or whether such effects are consistent over time and across different chain scales. Based on financial data reported by a sample of 275 hotels from 2007 through 2012, this study found that e-commerce expenses significantly and positively impacted rooms revenue for all sample years, except in 2007. When subgroup analyses were performed by chain scale, it was found that e-commerce expenses significantly contributed to the gross operating profit for midscale and upscale hotels but not for the luxury, upper upscale, and the upper midscale categories.

Publication Date

12-26-2014

Original Citation

Hua, N., Morison, C., & DeFranco, A. (2015). “The Other Side of Technology Adoption: Examining the Relationships between E-Commerce Expenses and Hotel Performance.” International Journal of Hospitality Management. 45, 109-120.

Number of Pages

109-120

Document Type

Paper

Language

English

Source Title

International Journal of Hospitality Management

Volume

45

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

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