Hotel marketing strategies in turbulent times: Path analysis of strategic decisions

a r t i c l e i n f o The hotel industry has been hit hard by the economic recession. Given the economic challenges facing businesses have not been seen since the Great Depression, hotel executives are making unstructured or first-time decisions, responding to the current business climate. Using McCracken's (1988) long interview method, four Pacific Asia hotel executives provide insights of how two major hotel chains develop new strategies in these turbulent times. To provide structure to these insights, Mintzberg, Raisinghani, and Théorêt's (1976) unstruc-tured strategic decision making model provides a template to map problems or opportunities and alternative development and selection. The World Tourism Organization projected a decline in international tourism for 2009 due to the global economic recession (WTO, 2009). Although projections for Asia were better, the region experienced negative growth (−3%) for the last six months of 2008. A combination of events related to the global financial crises—fluctuating oil prices, increasing inflation, and extreme market volatility—created an unhealthy economic environment affecting tourism and hotel industries (see Lomann, 2008). Despite economic conditions not seen since the Great Depression, the hotel industry's outlook remains positive suggesting adaptation to the turbulent business environment. What are the keys to their relative success? This paper examines the strategic marketing decision making process of hotel executives in Asia over the last year. Employing McCracken's (1988) long interview method, personal, face-to-face interviews of executives provide insights on the strategic marketing process as international hotel chains adapted to the dynamic changes occurring in Asia, particularly Japan, China, and Singapore. To provide structure to these insights, path analysis maps the unstructured decisions. Mintzberg, Raisinghani, and Théorêt's (1976) unstructured strategic decision making model provides a template for showing problems or opportunities, alternatives development, and alterative selection. During the last two turbulent years, the hotel industry adapted promotional methods, adjusted product offerings, and created new alliances. These changes resulted in more customers and provide compelling evidence that the hotel industry is prepared for a year of positive growth in 2011. This study's findings support qualitative methodology's importance to understanding business decision making. This study offers unique insights for building theory and collecting interpretative data to study strategy formation for multinational hotel chains. 2. Keys steps to mapping strategic thoughts Cause mapping permits visualizing systemic propositions of relationships and helps build system dynamic models permitting what-if simulations of eventual outcomes when one variable changes with a …