An examination of US hotel Segment strategy: Diversified, concentrated or balanced?

Seoki Lee, Qu Xiao, Kyung Ho Kang

Research output: Contribution to journalArticlepeer-review

9 Scopus citations

Abstract

Segment diversification is a common strategy applied by hotel companies. According to previous research on the modern portfolio theory, a company can reduce risks and thus increase its value with more diversified operations. Such reasoning can certainly apply to the hotel industry in terms of its segment strategy. However, the findings are inconclusive. In particular, other literature argues for more concentrated rather than diversified operations. This study therefore examines the impacts of segment diversification on companies' risk-adjusted performances among publicly traded US hotels. The results suggest that a moderate segment diversification strategy maximizes a company's risk-adjusted performance.

Original languageEnglish (US)
Pages (from-to)1257-1274
Number of pages18
JournalTourism Economics
Volume17
Issue number6
DOIs
StatePublished - Dec 2011

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Tourism, Leisure and Hospitality Management

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