Masters Theses

Date of Award

5-1999

Degree Type

Thesis

Degree Name

Master of Science

Major

Recreation and Sport Management

Major Professor

Youssri Allam

Committee Members

Mark McGrath, Ann Fairhurst

Abstract

It has long been assumed that advertising increases sales. Although scientific research methods are available to test advertising's impact on gross revenue (Campbell & Stanley, 1963; Banks, 1965; Raymond, 1966; and Woodside, 1990) and have been applied to several industries, (Banks, 1965; Caples, 1974; Donath, 1986; and Eastlack& Rao, 1988) no scientific study is available in lodging research on whether advertising causes an increase in occupancy, average daily rate, or financial return.Since many business owners and operators are planning marketing activities without foreseeing the outcome the results will produce, a need has been identified to measure the impact that marketing efforts can create for a hotel property (Broadbent, 1988).The purpose of this study was to investigate if hotel operations in the southeast that have a marketing budget have greater return than hotels that do not have a marketing budget. In addition, this research identified relationships that existed between total gross revenue of hotels with and without a marketing budget in theSoutheast and the following: (1) room occupancy percentages, (2) average daily room rate, (3) marketing budget, (4) market research, (5) property affiliation, location, (7)age of property, and (8) education levels of managers / operators.The population targeted by the researcher was lodging establishments listed in The Hotel Guide. The total combined number of hotels randomly chosen for the sample was 365, 10% of the population. A 15% response rate was achieved resulting in 56 usable surveys.' The research instrument for this study was a three-part survey containing question concerning (1) the hotels marketing budget, (2) demographic information about the hotel property, and (3) demographic information regarding the hotel operator completing the survey. Data analysis included Pearson's Correlationtests, to measure strength of relationships; Maim-Whitney tests, to examine the significant difference of two independent groups; and Kruskal-Wallis tests, to examine the significant differences of several groups.The results of this study indicated that hotels with a marketing budget have a significantly higher gross revenue and average daily room rate than hotels that do not have a marketing budget. Oppositely, average occupancy rate between hotels with a marketing budget and hotels with out a marketing budget was not significantly different. Lastly, this research found that hotels that have a marketing budget and conduct market research have significantly higher gross revenues than hotels that do not conduct market research and do not have a marketing budget. It was the goal of this research to aid hotel operators in understanding the total impact that advertising and marketing can create for hotels.

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