Decline and turnaround: a literature review and proposed research agenda for the hotel sector

Abstract

Tourism systems are composed of an inter-related and inter-dependent set of individual businesses, organisations and servicescapes. The hospitality industry, and more specifically the hotel sector, comprises many businesses that contribute significantly to the tourism system. Yet, the industry is renowned for business failures and poor financial returns. Increasing competition, globalisation, technology, social change and internal weaknesses are some of the reasons why tourism and hospitality businesses fail or perform significantly below expectations. When in a state of decline or poor performance, many businesses attempt a ‘turnaround’. Declining performance can have wide-ranging impacts not only on hotel businesses directly, but also upon those communities where local economies rely on tourism for jobs and economic prosperity. Consequently, an improved understanding of the processes of declining performance and turnarounds is particularly important to both researchers and practitioners. However, there has been limited research focused on turnarounds in the tourism industry, in general, and in the hotel industry, in particular. In this study we assess the literature on decline and turnarounds and propose an agenda for future research that will enhance our knowledge and inform ongoing debate on the process and impact of turnarounds in the hotel industry.

Keywords:

• turnaround
• management
• life-cycle
• rebranding
• hotels