Hotel management contracts and deficiencies in owner-operator capital expenditure goal congruency

Turner, Michael J. and Guilding, Chris (2010) Hotel management contracts and deficiencies in owner-operator capital expenditure goal congruency. Journal of Hospitality and Tourism Research, 34 4: 478-511. doi:10.1177/1096348010370855

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Author Turner, Michael J.
Guilding, Chris
Title Hotel management contracts and deficiencies in owner-operator capital expenditure goal congruency
Journal name Journal of Hospitality and Tourism Research   Check publisher's open access policy
ISSN 1096-3480
Publication date 2010-07-26
Sub-type Article (original research)
DOI 10.1177/1096348010370855
Volume 34
Issue 4
Start page 478
End page 511
Total pages 34
Place of publication Thousand Oaks, CA , United States
Publisher Sage Publications
Language eng
Abstract A review of the findings of prior empirical research concerning hotel management contracts between owners and operators is undertaken. It is noted that management contracts have become increasingly commonplace in the international hotel sector and that gross revenue and gross operating profit are the most extensively used determinants of operator incentive fee remuneration. These findings present a platform for examining how revenue and gross operating profit are deficient in promoting owner-operator goal congruency. In light of this, return on investment (ROI) and residual income (RI) are examined as potential alternative determinants of operator reimbursement. Although it is appears that both ROI and RI as determinants of hotel operator fees would represent an advance in promoting owner-operator goal congruency, a rationale outlining how RI is preferable to ROI is outlined. © 2010 International Council on Hotel, Restaurant and Institutional Education.
Keyword Capital expenditure
Hotel management contract
Residual income
Return on investment
Q-Index Code C1
Q-Index Status Confirmed Code
Institutional Status UQ

Document type: Journal Article
Sub-type: Article (original research)
Collections: Official 2011 Collection
UQ Business School Publications
 
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Citation counts: TR Web of Science Citation Count  Cited 13 times in Thomson Reuters Web of Science Article | Citations
Scopus Citation Count Cited 16 times in Scopus Article | Citations
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Created: Fri, 05 Nov 2010, 20:33:54 EST by Dr Michael Turner on behalf of UQ Business School