Strategy Divergence and Performance Polarization in the Hotel Industry

Abstract

The emergence of home-sharing services and technological advancements has transformed the lodging market, prompting strategic divergence for distinct brand positioning. Previous hospitality research primarily explored linear relationships between hotel brand strategy and performance, leaving a gap regarding the impact of brand strategy divergence on performance heterogeneity. In this respect, this study examined how hotel brands’ strategic divergence influences performance heterogeneity. By employing the bootstrap two-stage data envelopment analysis with customer satisfaction as an intermediate factor, this study computed service productivity and service effectiveness as performance measures. The results indicate significant differences in service productivity and effectiveness patterns based on brand strategy—upper-scale, lower-scale, or extended-stay-type positioning. Hotels cluster into “revenue-oriented” and “efficient provider” groups, revealing distinct performance polarization. Importantly, this polarization does not imply the inherent superiority of a specific strategy; rather, the findings suggest hotels may optimize performance structure based on their chosen strategy.