Competition in the international hotel industry

Abstract

To identify rivals in the international hotel industry, current practice is to use price, segment and proximity. Using price and segment to identify rivals can be problematic due to price discounting. Additionally, a clear way to measure proximity does not exist. The aim of this study is to develop a process which managers can use to accurately identify rivals. Network analysis and affiliation matrices, in particular, are used to show managers a simple, systematic way to quantify proximity. Affiliation matrices give managers a simple, numeric value to distinguish between primary and secondary competitors. Managers should also compare chains on other competitive dimensions to distinguish their relative competitive threat. Results suggest there will be more than one competitive dimension to distinguish between rivals. At times, international experience is a relevant competitive dimension; at other times, nationality is a relevant competitive dimension. Size, however, is very rarely a relevant competitive dimension.

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