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Cultural and culture-related barriers to the expansion of international hotel companies in Italy. A focus on franchising entry mode.

Purpose – This study seeks to examine the low brand diffusion in the hotel industry in Italy and if and how this can be ascribed to cultural and culture-related barriers. The specific focus is on franchising entry mode.

Design/methodology/Approach – The research is undertaken through a qualitative study, using a twofold approach. In-depth telephone interviews are utilised to collect data from hotel owners and development directors of the main international hotel companies expanding in Italy through franchising agreements.

Findings – The paper identifies three different cultural barriers to the diffusion of hotel franchising in Italy which seem to explain and justify the poor expansion success of international hotel brands in Italy. However, optimism regarding a more effective hotel franchising diffusion in the future arises from market conditions and from a renovated geocentric approach to expansion by companies.

Research limitations – The sample referring to hotel owners is definitely too small to allow generalisation to theory. Moreover, the research might have overcome geographical differences in the country.

Practical Implications – The study offers important insights to managers of international hotel companies, both at senior and country-based positions. Despite the barriers individuated are very difficult to overcome, a pro-active role by companies is strongly recommended. Firms should keep moving toward the achievement of the highest possible degree of geocentricity and further reinforce the educational role of development directors in the market. Expansion in the country applying different entry modes is another possibility to ease the diffusion of franchising.

Originality/value – The study is possibly the first specific examination of the hotel industry in Italy. Previous studies only included this country in the broader EMEA context overcoming Italian specificities and peculiarities. The lowest hotel brand diffusion in Europe despite the presence of largest hotel stock definitely deserved accurate explanations. The twofold approach undertaken is believed to have revealed aspects which could have remained obscured if the traditional organisational-centric approach was applied. This provides a stimulus for new researches.

Mostra/Nascondi contenuto.
1. Introduction Italy is the country with the largest hotel stock in Europe with more than one million rooms (Federalberghi, 2010); its heterogeneous hotel industry is dominated by independent, individually and small family owned hotel groups. Although this can be considered a general European phenomenon, it appears to be particularly accentuated in the Mediterranean peninsula. Italian hotel market is suffering a certain degree of maturity and saturation in terms of both offer and demand patterns but Italy can still be considered one of global leader countries with regard to the hotel industry. The operating presence of all the major international hotel companies witnesses its business attractiveness. It has been argued that the market saturation on the one hand and the increasing importance of marketing and technology on the other is putting some pressure on the independent hotels (Holverson and Revaz, 2006); branding appears to be one of the few solutions left to independent owners to keep performing well or even to survive. However, the estimated hotel brand penetration in 2009 was of only 7.4% in Italy, far away from a European level of brand diffusion (BNL Paribas Real Estate, 2010). Only 5.6% of the total rooms in the market belong to the 35 main international companies, regardless of the affiliation strategies. Among the few hotel entrepreneurs nowadays affiliated to companies in Italy, probably less than 5% opted for franchising. Surprisingly, very few studies focused on hotel franchising diffusion in Italy, and those which have been carried out, took Italy into consideration only in the broader EMEA (Europe, Middle East and Africa) context (e.g. Altinay, 2005b; Altinay, 2006; Altinay and Wang, 2006; Altinay and Okumus, 2010). Generally, the authors justified the importance of these studies by mentioning the low brand penetration in the EMEA area (24%). Similarly, it can be argued that Italian scenario, with the largest hotel market and the lowest brand and international franchisor penetration, also needs a closer exploration and more exhaustive analysis. The internationalisation literature does not seem able to provide an answer to the Italian low brand penetration, due to the application in these studies of what could be defined an organisational-centric perspective: particularly the assumption that cultural distance affects the decision on entry mode, implies the possibility for the company to adapt to the market. Some argued that when cultural distance is high, companies should opt for non-equity entry modes (e.g. Erramilli and Rao; Quer et al., 2007); others affirmed the tendency to prefer resource commitment

Tesi di Master

Autore: Enrico Federici Contatta »

Composta da 77 pagine.

 

Questa tesi ha raggiunto 213 click dal 05/10/2011.

 

Consultata integralmente una volta.

Disponibile in PDF, la consultazione è esclusivamente in formato digitale.