The strategic value of advertising expenditures in the tourism and hospitality industry

Rui Qi, David A Cárdenas, Xichen Mou and Simon Hudson
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Rui Qi: The University of South Carolina, USA
David A Cárdenas: The University of South Carolina, USA
Xichen Mou: The University of South Carolina, USA
Simon Hudson: The University of South Carolina, USA

Tourism Economics, 2018, vol. 24, issue 7, 872-888

Abstract: The purpose of this study is to investigate the strategic value of advertising expenditures in the tourism and hospitality industry. Adopting a market-based valuation approach and longitudinal analysis, this study assesses the magnitude of advertising value by comparing the magnitude of the value with those from other expenses and book value. Results show that the economic benefits from advertising expenditures, unlike other expenses, don’t expire in the current period. Furthermore, advertising expenditures are significant strategic investments in intangible assets, providing greater future economic benefits than other assets. In addition, there is no significant heterogeneity regarding the effectiveness of advertising expenditures across subsectors in the tourism and hospitality industry.

Keywords: advertising; firm market value; longitudinal analysis; strategic value (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:24:y:2018:i:7:p:872-888

DOI: 10.1177/1354816618786845

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