Growing the pie: an examination of coopetition benefits in the US lodging industry

Abstract

Purpose Coopetition is the simultaneous cooperation and competition among firms operating in a specific market. It is particularly relevant in tourism where many competing suppliers (hotels in this case) contribute to the facilitation and delivery of the tourism product, i.e. the destination. By engaging in cooperative arrangements, firms can increase the attractiveness and competitiveness of the tourism product and subsequently demand for individual firms. This study aims to explore the three types of benefits derived from cooperative relationships in the context of the hotel industry, as well as the link between coopetition and market performance. Design/methodology/approach This study adopts several scales from prior research to survey 475 hotels in the USA. Specifically, respondents were asked to evaluate their performance with regard to the three benefits of coopetition. The responses were used to model the benefits of coopetition as a higher-order construct in a two-stage partial least squares model. In the second stage, the higher-order construct was linked to perceived hotel performance and the respondents’ RevPAR index. Findings The results show that perceived benefits from coopetition are positively associated with hotel performance. Specifically, the model depicts positive links between the coopetition construct and the hotels’ perceived performance, as well as their RevPAR index. Interestingly, the results were not as strong for index performance and may be due to the relative nature of the measure. Research limitations/implications This study supports the notion that coopetition alliances between hotels provide a viable avenue for performance growth. Specifically, managers should consider working together to allocate resources strategically to grow the pie. It is important that managers measure the benefits of cooperative relationships outside of competitive index scores as these metrics may be relative to the cooperative arrangement. Originality/value The study is the first to investigate the three benefits of coopetition in the context of the hotel industry. Specifically, it is the first to establish a positive link between firm coopetition and perceived performance in the hotel industry at the firm level.