To Brand or Not to Brand? An Empirical Analysis of the Advantages and Disadvantages of Hotel Branding

43 pagesUsing a dataset with over 40,000 property-year observations of hotels in the United States from 2000-2019, we answer the question of whether or not branding a hotel is worth the extra costs incurred. Using a multivariate regression framework to control for hotel characteristics and fixed effects, we find that branded hotels have significantly higher Occupancy and RevPAR as their independent counterparts. We also look at profit measures, and only slightly higher EBITDAPAR for branded hotels. Using standard deviations and a similar regression framework, we are also able to draw conclusions about the risk. We find that branded hotels have lower year-over-year variation in Occupancy, ADR, RevPAR, and GOPPAR than similar independent properties. Putting this together, we conclude that although branding doesn’t have a significant impact on bottom-line profits, it does help even out both top-line and bottom-line performance measures