Investigating the impact of advertising during economic shocks on firm performance in the hospitality industry

Kim, Taewoo; Choi, Hyunsuk; Song, Chanho; Lee, Myong Jae

doi:10.1080/19368623.2019.1572563

Cited by 9 publications

(4 citation statements)

References 52 publications

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“…Nonetheless, the cost burden of advertising affects its ability to improve its profitability. Therefore, in line with previous studies that have suggested an optimum level of advertisement required to improve profitability (Kim et al , 2019), this study also proposes that managers of these firms determine the optimum level that will allow for profitability. Thus, they should target their investment in advertisement toward profit maximization.…”

Section: Discussionsupporting

confidence: 70%

“…However, it has a long shelf life in highly cyclical industries. Kim et al (2019) examine whether advertisement expenditure after economic shocks affects the performance of companies in the hospitality industry. By analyzing data from COMPUSTAT and the Research File in the USA, the study discovered that hospitality firms that spent more on advertising immediately after a global financial crisis performed better.…”

Section: Empirical Results Of Advertisement-financial Performance Rel...mentioning

confidence: 99%

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Advertising and financial performance: insight from a competitive market in Africa

Akorede

2023

MBE

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Purpose This study aims to examine the relationship between advertisement expenditure and firm performance as well as the moderating effects of firm age and size on this relationship. Design/methodology/approach Twenty-eight selected companies listed on the Nigerian stock exchange were examined. The study used multiple regression, a quantitative research method, to capture both the direct and moderating effects. Findings The findings show that advertisement has a positive relationship with sales but an insignificant relationship with return on asset. Furthermore, the results indicate that larger firms outperform smaller ones when using advertisements to enhance their sales. On the contrary, there is no significant difference between the use of advertisement by young and older firms in improving financial performance. Originality/value Due to the often-wrong use of resource base view in the advertisement–performance relationship and contradiction in research findings, this paper re-conceptualize advertisement as a necessary investment (just like plant and equipment) but not an investment that provide strategic value. The paper also makes novel argument by theorizing a negative relationship between advertisement and firms’ performance in the Nigerian context.

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Section: Discussionsupporting

confidence: 70%

Section: Empirical Results Of Advertisement-financial Performance Rel...mentioning

confidence: 99%

Advertising and financial performance: insight from a competitive market in Africa

Akorede

2023

MBE

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“…operatingexpense. Firms' operating expenditure is controlled since a part of this budget is spent on marketing and advertising, which might affect sales (Kim et al, 2019).…”

Section: Regression Models and Variables Descriptionmentioning

confidence: 99%

How environmental, social, and governance disclosure promotes sales? Empirical evidence from global firms

Tran

Pham

2022

Journal of Strategic Marketing

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This paper investigates the influence of environmental (E), social (S) and governance (G) disclosure, and the composite ESG disclosed by firms on their sales performance. Using the 2SLS IV regression method, the study analyses 826 global firms across seven years spanning the 2008 financial crisis to understand how firms use ESG to promote sales in normal and disruptive periods.The effects of ESG and S alone on sales are significantly positive, while no significant effect of E and/or G is found. ESG has a robust significant effect on sales in the time of market turbulence, but the effect is not robust in normal time. The interaction of E*S/E*G/S*G is also analysed. Even the effect of E alone on sales tends to be negative in our results, the interactive effect of S and E has a positive impact on sales. The study suggests ESG as a whole and S, in particular, is an effective marketing instrument. This paper is among the first to investigate the influence of ESG in whole or in part on sales using a global-level dataset, taking into account a contextual factor, i.e., market turbulence time.

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“…Hotels are increasingly operating in hostile environments characterized by fierce competition, intrusive public sector influence and unanticipated crises (Ivanov and Stavrinoudis, 2018;Kim et al, 2019). These external pressures not only heavily affect hotel performance, but threaten their survival (Lado-Sestayo et al, 2016).…”

Section: Introductionmentioning

confidence: 99%

Adapt to not just survive but thrive: resilience strategies of five-star hotels at difficult times

Shi

Weaver

et al. 2021

IJCHM

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Purpose This research aims to explore the strategies and tactics taken by five-star hotels to create and sustain competitiveness at difficult times, the role of innovation among the initiatives taken and the factors that influence managers’ decision in selection of coping measures. Design/methodology/approach The research was conducted in two stages. The first stage focused on textual analysis of online news reports on luxury hotels’ coping strategies taken between 2013 and 2018. At the second stage, expert interviews were carried out with 25 managers of five-star hotels to obtain richer information of hotels’ responsive measures. The qualitative data were analyzed by thematic analysis. Findings The results revealed that five-star hotels in China made adjustment in physical resource management, human resource management, marketing mix, operation process and external relations to maintain competitiveness during difficult times. A model of hotel resilience was developed based on the findings. Innovation was imbedded in the responsive measures throughout these areas. Managers’ selection of coping measures was affected by the hotel’s organizational culture, location, brand image and competitors. Practical implications The model of hotel resilience serves as a useful reference to plan and select strategies and tactics to respond to similar external challenges. Hotel managers are recommended to embrace a variety of innovations directed at both internal management and customer service during challenging times. Originality/value To the best of the authors’ knowledge, this study is the first empirical research that systematically examines the measures taken by hotels during critical times to maintain competitiveness, linking these to contemporary post-Fordist operational trends.

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Investigating the impact of advertising during economic shocks on firm performance in the hospitality industry

Cited by 9 publications

References 52 publications

Advertising and financial performance: insight from a competitive market in Africa

Advertising and financial performance: insight from a competitive market in Africa

How environmental, social, and governance disclosure promotes sales? Empirical evidence from global firms

Adapt to not just survive but thrive: resilience strategies of five-star hotels at difficult times

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