Hotel Diversification Strategy And Performance Research

With over 20 years' rapid development, Chinese hospitality industry has gained remarkable achievement all around the world. However, a majority of hotels are searching for breakthrough points under the current situation of high risk and low profit. Therefore, diversification strategy came to be favored by hotel managers as a preferable choice in a stage when hotel product exploitation and new market entrance is stagnant.Based on review and comment of related theories, the thesis sets a foot on analysis of diversified influential factors combining views of hotel managers, and reached a series of hypothesis. Upon establishment of models measuring correlativity between diversification and performance, the thesis conducted market research and analysis on representative data to explore relationship between diversification strategies and hotel performance. Finally, the thesis came to a conclusion that hotel performance and diversification strategy present a negative correlation at the beginning stage, although the overall degree of diversification could strengthen risk-resistance ability under certain circumstances. Contrary with traditional theories, hotel performance is positively correlated with the degree of non-related diversification while uncorrelated with the degree of related diversification under China's current economic conditions. Although scale of a hotel has great impact on diversification and is in a certain degree positively correlated with hotel performance, the correlation between them is not apparent.