Star rating and corporate affiliation: Their influence on room price and performance of hotels in Israel

Aviad A. Israeli

Research output: Contribution to journalArticlepeer-review

203 Scopus citations

Abstract

The purpose of this paper is to ascertain whether and how star rating and corporate affiliation, as signals of quality, influence pricing decisions of hotels in Israel in various geographical locations, each with its specific market characteristics and during two different periods in which the business environment suffers from a crisis due to the political circumstances in the Middle East. The data suggests that the star-rating system, which is traditionally used to rate hotels' quality, is a still stable and consistent predictor of room prices. However, in light of the increased usage of brand names in the Israeli industry, it was found that the ability to charge and receive a premium for the hotel corporate affiliation or brand name is not consistent. The analysis presents the case in which a premium for brand name is eroded by the influence of the crisis, by the level of corporate intensity in the region, and also by the relative strength of consumers in the different geographical locations.

Original languageEnglish
Pages (from-to)405-424
Number of pages20
JournalInternational Journal of Hospitality Management
Volume21
Issue number4
DOIs
StatePublished - 1 Dec 2002

Keywords

  • Hospitality
  • Pricing
  • Quality
  • Strategic assets
  • Yield

ASJC Scopus subject areas

  • Tourism, Leisure and Hospitality Management
  • Strategy and Management

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