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A study of hotel performance during both economic recessions and expansions indicates branded hotels are more profitable than independent hotels under all economic conditions, but the difference is particularly significant during recessions, says John O’Neill, associate professor of hospitality management at Penn State.
Several factors may explain the improved performance, researchers say, including large marketing campaigns, the global distribution systems of hotel chains offer centralized reservation systems, guest loyalty programs, and access through online travel agencies, such as Expedia.com and Travelocity.com.
But there also may be an emotional factor at play. Brands offer guests dependable service and experience, says O’Neill. “There’s an emotional share with branded hotels,” he adds. “In bad economic times, people return to the security of brands.”