Compete or Avoid? Assessing Brand Competition Strategies with Spatial Colocation Analysis

Lijuan Su, Andrei Kirilenko and Svetlana Stepchenkova ()
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Lijuan Su: School of Tourism Management, Sun Yat-sen University, Guangzhou 510275, China
Andrei Kirilenko: Department of Tourism, Hospitality, and Event Management, University of Florida, Gainesville, FL 32611, USA
Svetlana Stepchenkova: Department of Tourism, Hospitality, and Event Management, University of Florida, Gainesville, FL 32611, USA

Tourism and Hospitality, 2024, vol. 5, issue 1, 1-7

Abstract: Spatial competition considerations are important in hotel location selection. This study proposes and demonstrates a method of colocation network analysis to quantify the potential encroaching effect of spatial inter- and intra-competition between units of business brands that seek expansion. The environmental context of the study is a network of the top five budget hotel brands in the Beijing hotel market. The results reveal that brands implement different strategies in their hotel placement, which are subject to different levels of the encroaching effect. However, the method is applicable in a variety of hospitality settings, specifically in those that involve the development strategies of chain brands. The simulation capability of the method can assist hospitality brands in assessing the outcomes of a proposed development and, thus, aid hoteliers in the spatial allocation of new units with the least adverse effects on their existing business networks.

Keywords: brand expansion; budget hotels; colocation analysis; encroaching effect; negative externalities; spatial network (search for similar items in EconPapers)
JEL-codes: Z3 Z30 Z31 Z32 Z33 Z38 (search for similar items in EconPapers)
Date: 2024
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