Cornell Quarterly Article Examines Value of Central City Hotel Location

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. May 03, 2012

Ithaca, NY - May 2, 2012 - A new study published by the Cornell Hospitality Quarterly (CQ) finds that hotels located in center city business districts can charge higher rates and earn more money—but this is true only during high season. The study, "Premium or Discount in Room Rates? The Dual Effects of a Central Downtown Location," by Seul Ki Lee and SooCheong (Shawn) Jang, is the featured article in the May 2012 issue of the Cornell Hospitality Quarterly and is available at no charge by special arrangement with Sage Publications, which publishes the CQ on behalf of the Cornell School of Hotel Administration. The article can be read through the Cornell Center for Hospitality Research website: http://www.hotelschool.cornell.edu/research/chr/pubs/quarterly/featured/execsummary-16139.html. CQ is available by subscription through Sage Publications, which is making this article available at no charge for a limited time.

The premium value of a central business district (CBD) location is generally accepted by the hotel industry with the idea that even though the CBD is crowded, the hotels there see higher demand, can price higher, and achieve greater profitability. However, in a study of hotels in Chicago's Loop, Lee, a professor at Temple University, and Jang, of Purdue University, discovered that the high-rate, high-profit scenario occurs only during high season. When demand is low, on the other hand, the hotels engage in rate-based competition that is intensified by the presence of so many hotels. Thus, they found that hotels see higher premiums in the peak season and steeper discounts in shoulder seasons, as a result of competition with nearby hotels. This brings into question the current models of the location premium for CBD hotels.

The May 2012 CQ also contains a focus section on restaurant management, including an analysis of the effects of switching costs on customers' behavior toward full-service restaurants, the key elements that consumers seek in a wine list, and an application of robotics technology to quick-service restaurants. An additional article analyzes why the effectiveness of casinos' free-play coupon offers seems to fade over time.

About the Cornell Hospitality Quarterly
The primary objective of the Cornell Hospitality Quarterly is to publish articles that provide timely and actionable prescriptions for hospitality management practice. The articles we publish are based on important industry challenges that are examined using rigorous methods of inquiry. The content addresses a broad range of topics that are relevant to hospitality, travel, and tourism contexts.

About The Center for Hospitality Research
A unit of the Cornell School of Hotel Administration, The Center for Hospitality Research (CHR) sponsors research designed to improve practices in the hospitality industry. Under the lead of the center's 77 corporate affiliates, experienced scholars work closely with business executives to discover new insights into strategic, managerial and operating practices. The center also publishes the award-winning hospitality journal, the Cornell Hospitality Quarterly . To learn more about the center and its projects, visit www.chr.cornell.edu.

Center Senior Partners: ASAE Foundation, Carlson Hotels, Hilton Worldwide, National Restaurant Association, SAS, STR, and Taj Hotels Resorts and Palaces

Center Partners: Davis & Gilbert LLP, Deloitte & Touche USA LLP, Denihan Hospitality Group, eCornell & Executive Education, Expedia, Inc., Forbes Travel Guide, Four Seasons Hotels and Resorts, Fox Rothschild LLP, French Quarter Holdings, Inc., HVS, Hyatt Hotels Corporation, InterContinental Hotels Group, Jumeirah Group, LRP Publications, Maritz, Marriott International, Inc., Marsh's Hospitality Practice, McDonald's USA, newBrandAnalytics, priceline.com, PricewaterhouseCoopers, Proskauer, ReviewPro, Sabre Hospitality Solutions, Sathguru Management Consultants (P) Ltd., Schneider Electric, Thayer Lodging Group, Thompson Hotels, Travelport, WATG and Wyndham Hotel Group

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