Resource‐seeking agglomeration: a study of market entry in the lodging industry

Abstract

We analyze whether firms prefer collocating with incumbent firms when choosing among markets to enter, highlighting the role of resource-seeking as a motivation for collocation. We propose that entrants will locate near others possessing resources that can spill over, but will avoid locations where existing firms will exploit spillovers without contributing. To test these propositions, we analyze the location decisions of 570 new hotels in Texas between 1992 and 2000. We find that hotels are attracted to markets with branded upscale hotels. Further, we find that owners of upscale hotels avoid markets with hotels without similar resources.

Markets: The U.S. Lodging Industry

“…The data can be downloaded at ͗http://www.window-.state.tx.us/ecodata/taxfiles.html#hotel͘. Conlin and Kadiyali (2006), Kalnins (2004), and Chung (2004, 2006) have described and analyzed these data. The 1,387 franchised hotels in Texas in 1999 were distributed across 536 zip codes, 351 of which have more than one hotel with a name brand.…”

“…In a further 187 cases, a firm operates one branded and one nonbranded hotel in the same zip code. On one dimension, however, industry concentration may be lower than it appears to a casual observer: franchisees are very willing to compete aggressively against others affiliated with the same brand, though these are typically found in neighboring markets rather than in the same market (Kalnins, 2004).…”

A Spatial Analysis of Tourism Infrastructure in Romania: Spotlight on Accommodation and Food Service Companies

“…This perspective, emphasized in studies published in recent decades (e.g. Chung, Kalnins 2001, Kalnins, Chung 2004, Marco-Lajara et al 2016, complements the classical demand perspective that considers the availability of resources demanded by tourists as the exclusive rationale behind the tourist companies location decisions. Accordingly, our paper aims to reveal their distribution and resulted spatial agglomerations in Romania, as a background for rational decisions regarding the support that will be offered to the most relevant tourism destinations as well as the measures meant to enhance collaborative networks and competitiveness in the tourism activity-based agglomerations, creating synergies that can increase economic performance.…”

Do Hotels Benefit from Agglomeration?

“…Several studies focused on the tourism sector have shown that these externalities also arise, finding a positive correlation between firm agglomeration and hotel profitability [7,11]. Moreover, other studies suggest that hotels tend to be located where other hotels already exist because it allows them to improve both their efficiency and their chances of survival [12][13][14][15].…”