International Journal of Hospitality Management 34 (2013) 150–159

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International Journal of Hospitality Management

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Measuring hotel performance: Using a balanced scorecard

perspectives’ approach
Ruggero Sainaghi a,1 , Paul Phillips b,∗ , Valentina Corti a,1
a
IULM University, 20123 Milan, Italy
b
Kent Business School, University of Kent, Canterbury, Kent, CT2 7PE, UK

a r t i c l e i n f o a b s t r a c t

Keywords: This paper provides an examination of hotel performance research published in the seven leading hos-
Hotels pitality and tourism journals from 1992 to 2011, through the lens of the balanced scorecard (BSC).
Balanced scorecard The review seeks to answer three questions. What BSC perspectives are included in hotel performance
Perspectives
research published in major hospitality and tourism journals? What are the trends and implications for
Performance
future hotel performance research? What are the main geographical areas of publication outputs?
Literature review
Eleven hypotheses were tested using a database of 138 articles that fully met the key word selection
criteria of hotel, BSC and performance. The results suggest hotel performance attracts widespread atten-
tion from hospitality scholars, but significant gaps remain. Researchers have recognised the benefits of
including financial and non-financial indicators. Yet, more research is required in this area to offer hotel
organisations better approaches to the management of their performance. We conclude by identifying
three research gaps.
© 2013 Elsevier Ltd. All rights reserved.

1. Introduction owner(s) will be less burden with debt and will seek to generate
healthy operational profits. Academics, practitioners and consul-
Encouraging signs for the future of the global hotel sector remain tants use a variety of operational metrics to gauge operational
uncertain, due to growing evidence of challenging times ahead. performance. These can include: Occupancy (Jeffrey and Barden,
The World Travel and Tourism Council (2012) reinforce the impor- 2000), average room rate (ARR) (Israeli, 2002), revenue per avail-
tance of travel and tourism by highlighting that in 2011, travel able room (RevPar) (Namasivayam et al., 2007; Sainaghi, 2011),
and tourism accounts for 9% of global Gross Domestic Product total revenue per available room (TrevPar) (Shang et al., 2008) and
(GDP), over US$6 trillion, and 255 m jobs. The World Travel and gross operating profit per available room (GOPPAR) (Claver-Cortés
Tourism Council using 4% growth projections forecast that by 2022 et al., 2007).
the corresponding figures will be 10% of global GDP, some US$20 Traditional operational metrics provide a picture of profitability
trillion, and over 328 m jobs. Hospitality, which includes hotels in terms of efficiency, but fail to provide a systematic depiction of
will be at the forefront of the growth in jobs due to employ- effectiveness in terms of achievement of strategic objectives. Quan-
ment in new hotels. Yet, despite these developments several hotel titative metrics are historical, while qualitative metrics look into
companies are buckling under mountains of debt, such as Trav- the future and can help redefine strategy (Phillips, 2007). Defining
elodge (Britain, Ireland and Spain), and the Almond Hotel group the appropriate metrics for a corporate strategy can be as important
(Barbados). Bloomberg cites Robert Sonnenblick, Chairman of Son- as the actual content of the strategy. In the management literature
nenblick Development LLC who foresees huge increases in US Johnson and Kaplan (1987) note the need for better performance
foreclosures during 2012, as debts come due but with a paucity measurement systems. Since then, several authors postulate mea-
of available financing. surement models that provide a more integrated approach linking
High level of fixed costs, interest expenses together with the operations to corporate strategy (Chathoth and Olsen, 2007).
inability to refinance debt will lead to some hotels companies going Recent approaches to performance measurement have iden-
bankrupt. In these cases, hotel assets will be sold and the new tified the inadequacies of solely relying on quantitative and
short-term indicators, and have led to the development of frame-
works, such as: performance pyramids and hierarchies (Dixon et al.,
∗ Corresponding author. Tel.: +44 01227 824944; fax: +44 01227 761187.
1990), intangible asset scoreboard (Sveiby, 1997), SMART (Cross
E-mail addresses: [Link]@[Link] (R. Sainaghi), [Link]@[Link]
and Lynch, 1988), performance prism (Neely et al., 2002), suc-
(P. Phillips), vale.corti29@[Link] (V. Corti). cess dimensions (Shenhar and Dvir, 1996) and balanced scorecard
1
Tel.: +39 02 89 141 27 48; fax: +39 02 89 141 27 48. (Kaplan and Norton, 1992).

0278-4319/$ – see front matter © 2013 Elsevier Ltd. All rights reserved.
[Link]
 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159 151

These frameworks provide a way of capturing financial and non- Dickson, 2001). Managers are able to make better decisions by using
financial performance measures. However, in today’s economic the four perspectives of the BSC (Lipe and Salterio, 2000) and like
and competitive environment achieving and sustaining compet- working for organisations with effective performance management
itive advantage necessitates explicit links between strategy and systems (Malina and Selto, 2001). The BSC mixes different meas-
performance measures. Performance measurement frameworks ures: financial and operational, qualitative and quantitative (Dess
now need to move beyond the mere collection of financial and and Shaw, 2001; Ittner et al., 2003). The BSC framework enables
non-financial measures and seek to identify causal links among managers to look both to the past (using financial indicators) and
measures, strategies and outcomes. The performance measure- to the future (using learning and growth indicators) (Banker et al.,
ment literature emphasises the importance of these linkages 2004).
between strategy and such measures (Otley, 1999; Ittner et al., Given the generic and hospitality specific BSC literature, its ben-
2003; Chenhall, 2008). According to Chenhall (2008) a distinctive efits, practitioner popularity together with the need to build and
feature of the BSC is that it identifies financial and non-financial extend prior hospitality knowledge and practice, the four perspec-
measures covering different perspectives, which provides a way of tives of the BSC were used to guide this study. Also, the increasing
translating strategy into action. Speckbacher et al. (2003) asserts influence of intangible assets in the hotel sector (Zigan and Zeglat,
that the BSC has evolved and can assist practitioners by provid- 2010) make the BSC with its tangible and intangible focus an appro-
ing three different types of performance measurement system, priate management tool for this study.
minimum standard, cause-and-effect and fully developed. The min- The present study seeks to review existing work and to assess
imum standard combines financial and non-financial measures. the depth and breadth of prior hotel performance work, with
The next evolution is the cause-and-effect, which illustrates the emphasis on BSC perspectives. Also given the global nature of the
salient relationships between strategies and outcomes. The final hotel sector, the study looks at the geographical spread of prior
evolution is the fully developed, which defines the objectives, research. These led to the development of three research ques-
outcomes and connecting incentives for the organisation. This indi- tions. What BSC perspectives are included in hotel performance
cates that the BSC can be used in organisations at different stages research published in the major hospitality and tourism journals?
in the development of performance measurement systems, which What are the trends and implications for future hotel performance
broadens the appeal of this research to academics and practitioners. research? Given the global nature of the hotel sector what are the
Collectively, these three types of performance measurement main geographical areas of publication outputs?
systems provide assistance in strategy implementation (Otley, This study contributes to the literature in three areas. First,
1999; Ittner et al., 2003). Furthermore, the BSC has gained this paper deals with a topic that is timely and be of interest to
acceptance in the hospitality literature by being used to inte- both academics and practitioners. The study examines hotel perfor-
grate performance measurement with other strategic issues. For mance research published in seven leading hospitality and tourism
example, McPhail et al. (2008) illustrate the importance of the journals from 1992 to 2011, through the lens of the BSC. Second,
alignment of the learning and growth perspective with perfor- this two-decade review will identify gaps in prior BSC perspective
mance measures. Chen, Hsu and Tzeng (2011) link the BSC with research. This will provide opportunities to develop a better under-
risk management and Phillips (2007) provides a hotel case study, standing of hotel performance research, which can be used to help
which illustrates the BSC being used as an incentive scheme in a future theoretical investigations. Third, the study provides oppor-
major UK hotel group. tunities for practitioners to enhance the sophistication of their BSC
The BSC is now a global management tool (Silk, 1998). Ittner and frameworks, by broadening their use of perspectives, or even assist-
Larcker (2001) note the popularity for both practitioners and aca- ing in the creation of new hotel performance frameworks. The study
demics around the world. More recently, Qu, Cooper and Ezzamel’s contributes to both knowledge and practice by considering the aca-
(2011) research findings found that the growth in use of the BSC demic scientific literature.
is due to three main reasons. First, many users have taken the idea This study adopts the same journals used by Li (2008) in a review
and adapted it to their own needs. Second, the BSC is generic the- of entrepreneurship research published in leading hospitality and
ory and can be customised into local practices through customised tourism management journals. These journals include: Cornell Hotel
templates. Third, customisation creates the needs for experts who and Restaurant Administration Quarterly (CHRAQ), International
use extensive exemplification through real cases, which make the Journal of Hospitality Management (IJHM), Journal of Hospitality and
BSC thrive as a product in the marketplace. Tourism Research (JHTR), International Journal of Contemporary Hos-
More than two decades after first BSC publication (Kaplan and pitality Management (IJCHM), Annals of Tourism Research (ATR),
Norton, 1992), the findings of Rigby and Bilodeau (2011) illus- Tourism Management (TM); Journal of Travel Research (JTR).
trate the enduring popularity of the BSC for practitioners. Empirical The remainder of this paper continues as follows. The next sec-
research is performed by the strategy consulting firm Bain & Co tion provides the BSC theoretical background, which leads to the
(Rigby and Bilodeau, 2011). Now in its 18th year with responses development of the hypotheses. The hypotheses relate to the four
from more than 11,000 executives, the management tools survey perspectives, the geographical scope and the research methodolo-
shows that the BSC remains one of the most popular management gies employed. Next, the review method is outlined. Followed by
tools. Executives in North America, Europe, Asia and Latin Amer- results. Finally, major themes are discussed; conclusions, manage-
ica were asked to rate their satisfaction with the management tools rial implications are drawn.
they use. In 2011, 1230 executives responded and the top five man-
agement tools were benchmarking, strategic planning, mission and
vision, customer relationship management, and outsourcing. Exe- 2. Theory and hypotheses
cutives ranked the BSC as the sixth most used tool (Rigby and
Bilodeau, 2011). 2.1. The balanced scorecard
In the academic arena, several benefits are proposed. Behn
(2003) mentions the ability of the BSC framework to combine the Hotel performance measurement suffers from limitations
needs of different stakeholders, such as clients, shareholders, finan- including excessive focus on profit (Brander Brown and McDonnell,
cial institutions, employees. Prior to the BSC, previous models were 1995), short-term (Denton and White, 2000), unbalanced (Harris
mainly focused on a specific stakeholder (usually shareholders) and Mongiello, 2001), unsatisfactory for businesses seeking a com-
and were not integrated into the strategy process (Wisniewski and petitive advantage (Evans, 2005), historical orientation (Atkinson
152 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159

and Brander Brown, 2001), lack of market orientation (Phillips and of indicators “based upon conventional cost oriented accounting
Louvieris, 2005). Moreover, financial approaches reduce corporate methods” (1998, p. 163). Sainaghi (2010a) observes in his study
stakeholders to mainly shareholders, ignoring the vital role played that 23% of publications use financial performance dimensions to
by other stakeholders such as customers (Mohsin and Lockyer, measure hotel results and 53% use financial ratios as a performance
2010) and employees (Clark et al., 2009). indicator.
The objectives and measures of the BSC derive from four
perspectives: financial, customer, internal business process and HP2. The number of publications in leading hospitality and
learning and growth. These four perspectives provide the frame- tourism journals using financial indicators increase over time.
work for the BSC (Kaplan and Norton, 1992). The BSC considers Concerning the remaining three perspectives as a whole, exe-
the tangible assets (financial) and three intangible assets and intel- cutives and managers should use operational and organizational
lectual capital (customer, internal business process and learning indicators (Venkatraman and Ramanujam, 1986) to measure the
and growth). This transforms practice from the sole use of lagging achieved results. “Empirical research carried out in the USA [. . .],
indicators to a balance of lagging and leading indicators. indicates that hotel companies appear to utilize a wide range
The BSC emphasizes that financial and nonfinancial measures of measures – including not only traditional financial account-
must be part of the information system for employees at all levels of ing measures, but also indicators of managerial behaviour as well
the organization. Effective decision-making requires accountability as various other outcome measures of effectiveness” (Brander
of all staff. Front-line employees must understand the financial con- Brown and McDonnell, 1995, p. 7). Supporting Brander Brown and
sequences of their decisions and actions; senior executives must McDonnell (1995), Harris and Mongiello state: “interpretation of
understand the drivers of long-term financial success (Kaplan and the findings suggests that general managers select indicators which
Norton, 1996a). Organisational goals, objectives and metrics must directly represent their operations, human resources and mar-
be more than just a somewhat ad hoc collection of financial and keting decisions, instead of simply waiting for the effects of the
nonfinancial performance measures; they should derive from a top- financial indicators” (2000, p. 125).
down process driven by the mission and strategy of the firm or of
the business unit (Kaplan and Norton, 1996b). HP3. The number of publications in leading hospitality and
In summary, the four perspectives enable organisations to gain tourism journals using non-financial indicators increase over time.
a holistic view of performance measurement.
We now consider each perspective, starting with the customer
Financial perspective measures indicate whether a company’s
perspective. Hotel firms are usually described as “market oriented
strategy, implementation and execution are contributing to
companies” (Sin et al., 2005), operating in a highly competitive
bottom-line improvement. Financial objectives typically relate to
environment, disrupted by shocks (Baggio and Sainaghi, 2011) and
profitability.
strongly influenced by seasonality (Cuccia and Rizzo, 2011). In this
Customer perspective provides a way for managers to identify
context a clear focus on market orientation is a requisite to be com-
the customer and market segments in which the business unit will
petitive (Tse et al., 2005). The customer perspective is a natural
compete and the measures of the business unit’s performance. The
area for research “because hotels operate in an oligopolistic mar-
core outcome measures include customer satisfaction customer
ket, in which small units compete to attract clients in order to be
retention, new customer acquisition, customer profitability, and
economically viable” (Barros, 2004, p. 177).
market and account share in targeted segments.
In the internal business perspective, executives identify the criti- HP4. The number of publications in leading hospitality and
cal internal processes in which the organization must excel. These tourism journals using customer indicators increase over time.
processes enable the business to deliver the value proposition and
satisfy shareholder expectations of excellent financial returns. This “Customer-based measures are important, but they must be
perspective includes both innovation and operations. translated into measures of what the company must do internally
Finally, learning and growth identifies the infrastructure that the to meet its customers’ expectations. After all, excellent customer
organization must build to create long-term improvement. Busi- performance derives from processes, decisions, and actions occur-
nesses are unlikely to be able to meet their long-term targets for ring throughout an organization” (Kaplan and Norton, 1992, p. 176).
customers and internal processes using existing capabilities. To The internal business perspective plays an increasing importance in
close these gaps, businesses will have to invest in reskilling employ- hotel research. Efficiency and productivity management is a growth
ees, enhancing information technology and systems, and aligning area of importance, given the increase in competitive pressure. The
organizational procedures and routines. oligopolistic features of the market (Phillips, 1999) have made the
search for efficiency “become essential not only for profitability, but
2.2. Hypotheses also for a hotel’s survival” (Chen, 2007, p. 696). A stream of research
use data envelopment analysis (DEA) to measure efficiency and
To better understand prior hotel performance research with productivity. “The DEA model computes the performance or effi-
emphasis on BSC perspectives, the following are tested in the study. ciency index for DMU [Decision Making Unit] k as a ratio of multiple
outputs to multiple inputs, subject to the constraint that all the effi-
2.2.1. Perspectives focus and empirical papers ciency indexes for other DMUs are equal to or smaller than one”
Considering the scope of hotel performance, the number of con- (Neves and Lourenco, 2009, p. 4).
tributions can be expected to increase. We name this as the first
HP5. The number of publications in leading hospitality and
hypothesis given its fundamental relationship to this study.
tourism journals using internal business process indicators increase
HP1. The number of publications in leading hospitality and over time.
tourism journals focusing on hotel performance increase over time.
“The customer-based and internal business process measures on
Several scholars highlight the prominence of financial indicators the BSC identify the parameters that the company considers most
in hotel performance research. “Financial measures have been the important for competitive success. But the targets for success keep
traditional means of performance measurement” (Bergin-Seers and changing” (Kaplan and Norton, 1992, p. 177). The fourth perspec-
Jago, 2007, p. 146). Harris and Brander Brown note that the diffusion tive, growth and learning, includes investments in people, systems
of Uniform System of Accounts for Hotels has increased the number and organizational procedures (Kaplan and Norton, 1996b). Human
 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159 153

resource management is considered a strategic asset in hospital- 1991; Kiggundu et al., 1983) in terms of generalizability to a non-
ity industry. Research has shown that human resource policies western context. Cultural differences may also limit the ability of
and practices can be an important source of a firm’s competitive management to transfer and operationalize some systems and pro-
advantage in the marketplace, since they are difficult to trade or cedures” (2006, p. 455).
imitate (Namasivayam et al., 2007). Concerning systems and orga- Europe is the leading market destination. According to the
nizational procedures the hospitality sector is largely dominated 2011 UNWTO figures, it currently accounts for approximately 51%
by chain firms (Ingram, 1996), which increases the probability of of international tourism arrivals. Tourism is increasingly being
survival (Ingram and Baum, 1997). The ability to introduce new seen as a strategic activity for many European countries. Espe-
organizational models, and to continuously adapt organizational cially, given the ability of the sector to generate economic value
variables to the changing environment, represents a prerequisite and jobs (Balaguer and Cantavella-Jordá, 2001). Due to increas-
to become “competitive, global and technologically driven” (Assaf ing international competition, there is growing interest on tourism
and Cvelbar, 2011, p. 391) and “highly sensitive to the state of the competitiveness for both academicians and practitioners. These
economy” (Chen, 2010, p. 665). observations support the following hypothesis.

HP6. The number of publications in leading hospitality and

HP8. The number of publications in leading hospitality and
tourism journals using innovation and learning indicators increase
tourism journals using European data increase over time.
over time.

Based on Sainaghi’s results (2010a) it is interesting to note that According to recent UNWTO statistics, Asia obtained significant
many papers focusing on hotel performance use more than one increases in tourism arrivals with sub-regions such as South East
dimension to measure results. Operational and financial perfor- Asia recording a 10.4% increase during 2011. Nevertheless, despite
mance are mixed in 33% of the publications, operational, financial the high growth rates, many articles describe an intensive rivalry,
and organizational dimensions are used together in 5% of cases. which generates high pressure to increase efficiency and productiv-
Moreover, operational perspectives which is the most used dimen- ity (Ooncharoen and Ussahawanitchakit, 2008; Tseng et al., 2008).
sion in the selected publications (36%), is often linked to the In this context performance measurement plays a key strategic
“customer and internal business perspectives”. “In the last two activity and for this reason the number of published papers is
decades, academics and practitioners have been claiming that expected to increase.
performance management is only possible if the performance mea-
surement system reflects the company’s multidimensional nature HP9. The number of publications in leading hospitality and
[. . .], and a similar concern exists in the hospitality industry [. . .]” tourism journals using Asia data increase over time.
(Neves and Lourenco, 2009, p. 698). Translating these conclusions
from performance dimensions to BSC, we can formulate the follow- The North American context presents some traits similar to
ing hypothesis. The wide-scale adoption of the BSC by practitioners Europe: the tourism industry shows less growth; this sector has
should influence the number of perspectives included in research a long tradition (Baum and Haveman, 1997), high capillarity and
studies. attracts tourists with a higher spending capacity (WTO, 2008). As
HP7. The number of publications in leading hospitality and in the European style, the economic development of North America
tourism journals using indicators for more than one perspective has not been tied to the tourism sector, but rather to manufacture
increase over time. and commercial industries. The USA ranks first in tourism receipts
and second in international arrivals.
Some distinctive features of the American model are linked
2.2.2. Geographical focus and empirical papers
to the number of hospitality firms that usually present the traits
Performance measurement is deeply linked to the specific
of large firms (Lee and Jang, 2007). The chain affiliation model
context under which the hotel operates such as the economic envi-
and more generally the use of organizational innovation have
ronment (Tang and Jang, 2009), the degree of market concentration
sprung up and become successful in this context (Chung and
(Pan, 2005), the type of destination (Reichel and Haber, 2005) or
Kalnins, 2001). Most large companies are listed increasing the
the presence of external shocks that affect firm performance (Chen
pressure for developing efficient performance measurement sys-
et al., 2007).
tems (Weinbaum, 2009). Furthermore, the abundance of publicly
Harrington (2004) contends that the various hospitality indus-
available data increases the number of studies focusing on North
tries operate in significantly different environments, raising the
America.
proposition that resulting managerial and organizational practices
also differ. Geographical context is a synthesis of cultural, eco-
nomic, political and social forces. Tourism and hospitality scholars HP10. The number of publications in leading hospitality and
note the salient differences in some countries macroeconomic vari- tourism journals using North American data increase over time.
ables (Tang and Jang, 2009). These include the economy’s rate
of growth and the contribution that tourism accounts for local In the field of performance research there are primarily two
GDP; and, on the other hand, to firm’s differences in term of size study streams: (i) quantitatively smaller approach focused on the
(Nabawanuka and Lee, 2009), ownership structure (Ingram and analysis of performance measurement systems currently used by
Baum, 1997), relationships between hospitality firms and their con- firms or, more rarely, proposing new index panels (Brander Brown
text (Lee and Park, 2009). and McDonnell, 1995); (ii) exploring the link between the per-
In order to operationalize geographical context, some authors formance of hotel businesses and various factors characterizing
suggest the relevance in term of market share and the cultural business strategy and its functions or the environment in which the
differences between North America, Europe and Asiatic countries business operates (Chathoth and Olsen, 2007). This latter seam of
(Sainaghi, 2010a, 2010b). Jogaratnam and Tse observe “most if not research is growing and is larger than the former seam. The majority
all hospitality strategy related research has been conducted in rela- of research studies in both seams are of an empirical nature.
tion to the North American context. Yet, research evidence suggests
that western theories focusing on organizations and their environ- HP11. The number of empirical publications in leading hospitality
ments are likely to suffer from a weak fit (Boyacigiller and Adler, and tourism journals increase over time.
154 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159

Table 1
Performance articles published in major tourism and hospitality journals.

Year IJHM CHRAQ IJCHM TM JHTR ATR JTR Total

1992 /22 /55 /23 /47 /12 /39 /41 /239

1993 /22 /42 /32 /32 /39 /43 /41 /251
1994 2/22 /35 /33 /37 /29 /43 /33 2/232
1995 /23 1/53 3/43 /59 /12 /49 /37 4/276
1996 5/21 1/48 /39 /55 /24 /46 /53 6/286
1997 /21 1/44 /39 /48 1/10 /45 /46 2/253
1998 /22 2/55 1/38 1/47 1/31 /40 /41 5/274
1999 /26 1/54 /46 /48 1/21 /39 /36 2/270
2000 1/23 4/47 3/53 2/46 /26 /45 /44 10/284
2001 /19 1/53 1/45 /51 /25 /44 /42 2/279
2002 1/22 1/55 /49 1/47 1/21 /50 /42 4/286
2003 2/23 2/34 2/61 2/52 /27 /46 /42 8/285
2004 1/30 1/26 2/54 /60 /29 /48 /42 4/289
2005 4/34 1/29 3/54 3/77 /22 1/51 1/42 13/309
2006 2/44 /28 3/50 3/108 1/25 /52 /48 9/355
2007 4/69 2/29 4/51 3/124 1/24 /50 /42 14/389
2008 3/65 3/31 /59 3/95 /22 /47 /44 9/363
2009 7/70 5/43 4/56 2/90 /27 /29 /40 18/355
2010 8/80 3/39 5/56 2/93 /53 /52 /41 18/414
2011 2/53 3/10 /31 2/92 1/11 /14 /18 8/229

Total 42/711 32/810 31/912 24/1308 7/490 1/872 1/815 138/5918

% 5.9% 4.0% 3.4% 1.8% 1.4% 0.1% 0.1% 2.3%

3. Review method as theoretical studies and empirical studies were studies that
include data or data analysis.
To identify studies for review, a set of articles published in lead- 2. Descriptive information, such as the year of publication and type
ing hospitality and tourism management journals was identified. of journal, was collected in the manner of the work by Capon et al.
To ensure reliability, the sample selection is based on keywords. (1990, p. 1145).
Articles were selected according to three criteria: 3. The indicators used to measure hotel performance were those of
the traditional BSC perspectives.
1. Journals: McKercher et al. (2006) adopted a peer assessment
method to rank 70 tourism and hospitality journals by 314
4. Results
tourism and 191 hospitality experts. Seven referred journals
received the highest ranks. The rankings were based on their
This section has been divided into two subparagraphs: the first
aggregate importance score. This was calculated by deter-
reports the descriptive statistics of the sample and test the hypothe-
mining: the number of experts who assessed its quality; the
ses introduced earlier. The second paragraph depicts some trends
awareness level as a percentage of the total cohort (n/N); the
related to the BSC perspectives and geographical scope.
mean quality rating (m) given by those who rated the journal.
The aggregate importance rating was the percentage of the max-
imum score possible if all experts had identified the journal and 4.1. Descriptive statistics and regressive models
given it highest rating of five. For example, the aggregate score
for IJHM of 67.4, which was ranked fourth was derived as fol- Of the original total of 5918 articles being published in the seven
lows: (n × m)/(N × 5) × 100 = (161 × 4.0)/(191 × 5) × 100 = 67.4. hospitality and tourism journals (see Table 1), 138 articles (2.3%)
Following Li (2008) the top seven ranking journals were used in met the key word selection criteria of hotel, BSC and performance.
our study. This research design has also been used by Li (2008). The spread of publications over the seven journals ranged consid-
2. Keywords: The study adopts the following approach in creat- erably. The IJHM had a high of 42 articles (5.9%) to a low in ATR and
ing its database. The research study was carried out at the end JTR, which both had one article each (0.9%) in 2005.
of March 2011 using three keywords of hotel, performance, These results confirm the greater focus on hotel performance
and balanced scorecard. These keywords were researched in research by hospitality journals (IJHM, CHRAQ, IHCHM) compared
abstract, title and keywords in the following databases: Science to tourism-oriented journals (TM, JHTR, ATR, JTR).
Direct (ATR, TM, IJHM), Emerald (IJCHM), Sage (CHRAQ, JHTR), In order to quantitatively test the hypotheses, a regression anal-
Business Source Elite (JTR). ysis was conducted, using the year of publication as a dependent
3. Year of publication: The time horizon embraces 20 years, from variable. The independent variables include the specific item of
1992 to 2011. each hypothesis (e.g. the total number of papers included in the
sample in the case of HP1) and the total number of published arti-
A row sample of 261 articles was initially identified. After fur- cles as a control variable. Table 2 reports the results; the analysis
ther analysis a sample of 138 were selected. The excluded articles was conducted using SPSS software, version 18.
applied the keywords to papers pertaining to different sub streams Generally speaking, for all the six models the variance explained
of research. by the control variable (see the line “model R2 control only”) is 45.6%
The analysis procedures include classifying and specifying the and this is significant. Furthermore, all the regressions present a
following information: value of variance inflation factor (VIF) that is always lower than the
maximum level of five suggested by Hair et al. (2005); the maxi-
1. The nature of the study was identified by distinguishing mum level of condition index is 22.223 (HP11) and also in this case
between: (i) theoretical or methodological and (ii) empirical it is lower than the critical value of 30 indicated by Belsley et al.
papers. Following Li (2008) literature reviews were defined (2004). These two indices suggest the absence of multicollinearity.
 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159 155

Heteroskedasticity was controlled using the White test, ver-

(0.010* )

(0.794)

(0.001)

(0.000)
ifying the null hypothesis of the homoscedastic sequence. The

Sig.
obtained value is not statistically significant, so it is possible to
Empirical

affirm the validity of the model (White, 1980).

(HP11)

14,895

22,223
Value

(0.018* ) 0.742

0.456

0.637
0.181
0.068

3234
3036
Focusing attention on the first regression model, the number of
published hotel performance articles in seven leading hospitality

(0.002)

(0.001)

(0.000)
and tourism management journals (HP1) presents a positive coef-
Sig.

ficient (0.703) which is significant (0.013), and confirm the first

hypothesis.
America

(HP10)

13,417

13,776
Value

0.578

0.456

0.612
0.156
(0.029* ) 0.407

The second model (financial indicators) shows a positive coeffi-

3207
1060
cient (0.353) but is not significant (0.158). The use of non-financial
measures depicts both a higher beta (0.639) and is significant
(0.429)

(0.001)

(0.000)
(0.014), which is able to increase the variance explained (0.622).
Sig.

Focusing on the other BSC perspectives, customer and internal

12,354

20,588
business process perspectives do not show a significant coefficient
(HP9)

Value

0.599

0.456

0.592
0.136
0.203

2626

2651
Asia

(0.342) and (0.158) respectively. Only the innovation and learning

perspective shows both a positive coefficient (0.516) and a signif-
(0.228)

(0.029)

(0.001)

(0.003)

icant value (0.037), which is able to increase the R2 by 12.5%. The

Sig.

use of more than one perspective (HP7) is not significant.

Focusing on geographic scope, both Asia (HP9) and America
Europe

16,196
(HP8)

Value

0.269

0.512

0.456

0.501
0.045
8548

1579

2876

(HP10) research show a high positive (0.599) and (0.407) and sig-
nificant coefficient (0.029) and (0.018) respectively. This suggests
(0.158)

(0.070)

(0.001)

(0.002)

a clear geographical research focus. This is in contrast to Europe

More than one

Sig.

(HP8), where the coefficient is positive (0.269) but is not significant

perspective
indicators

(0.228).
17,549
(HP7)

Value

0.444

0.456

0.518
(0.037* ) 0.340

0.062

1862
9120

3107

Finally, empirical studies (HP11) depict the highest coefficient,

in term the coefficient (0.742) is significant (0.010) with a change
in R2 (18.1%).
(0.206)

(0.001)

(0.001)
Innovation and

Sig.
indicators
learning

18,643
11,805

4.2. Trends in tourism research

(HP6)

Value

0.516

0.456

0.581
0.125
0.300

2115

3074

The regression analysis suggests some trends in performance

(0.158)

(0.048)

(0.001)

(0.002)

research. These results are “past-oriented”, however, given the long

Sig.

period of analysis (20 years) this can support some hypotheses

indicators
business
Internal

testing related to the future.

16,482
(HP5)

Value

0.324

0.468

0.456

0.517
0.061
9113

1692

2314

The field of performance is clearly attracting increasing atten-

tion by researchers, in terms of the absolute number of published
(0.342)

(0.027)

(0.001)

(0.004)

studies (left side of Fig. 1) and the relative importance (right side of
Sig.

Fig. 1). This confirms the old adage in the field of strategic manage-
indicators
Customer

ment: performance is a key outcome for any strategy and survival

16,543
(HP4)

Value

(0.014* ) 0.218

0.539

0.456

0.485
0.029
7991

1635

3352

is a necessary condition.
Fig. 2 depicts four charts describing the research trends for each
BSC perspective. In order to facilitate direct comparisons, all graphs
(0.445)

(0.001)

(0.000)
Non-financial

use the same scales. Results suggest a relative stability in papers

Sig.
indicators

focusing on financial performance. This is not surprising given the

13,965

20,058

synthetic nature of this performance, widely used from key stake-

(HP3)

Value

0.639

0.183

0.456

0.622
0.166

2457

3327

holders (debt holders, shareholders, suppliers) to evaluate firm

performance.
(0.158)

(0.094)

(0.001)

(0.002)

Customer indicators represent the most researched area,

Sig.

attracting in some (few) years more than 50% of the sample. Results
indicators
Financial

confirm that for firms with a high level of fixed assets and costs, rev-
90.112

18,199
(HP2)

Value

0.353

0.425

0.456

0.517
0.061

2013

3022

enue management represents a priority for linking decisions and

results.
(0.013*)

(0.682)

(0.001)

(0.000)

Internal business process indicators represent the least studied

Sig.

research area with less than 20% of the sample in many years. The
Performance

graph does not reveal a clear trend, however in the past 10 years
articles

14,212

21,758
(HP1)

this perspective appears to be increasing its relative weight.

Value

0.456

0.626
0.703

0.105

3439
2906
0.17

Innovation and learning indicators are widely used and in 2008

Beta (significant level).

accounts for more than 50% of the sample. Peaks are often followed
performance articles
Dependent variable:

Full model counts of

Independent variable

Count of all articles

Regression analysis.

year of publication

by a fall, however the trend is upwards, such as confirmed by the

Change in R2 with
Model R2 control

Control variable
Control variable

Condition index

regressive coefficient.
Full model R2
F (full model)

Independent
independent

The geographical scope is summarised in Fig. 3. Europe shows

p < 0.05.
variable

variable

a stable trend, with a relative weight fluctuating between 30% and

Table 2

only

40%; only in 2 years did European studies account for at least 50%
VIF

of the total. Asia represents the most studied context, with many
156 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159

Sample (# of published papers) Sample in % of total published papers

20 6,0%

16 5,0%

4,0%
12
3,0%
8
2,0%
4 1,0%

0 0,0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Fig. 1. Trends on performance articles.

years being in excess of 50%. North America contributes less than The multidimensional nature of performance measurement led
20% in many years, but the trend is now upwards. to increasing attention being placed on the customer. Being market
oriented in turbulent environments led to the initial growth in cus-
tomer perspective research, but research on other perspectives has
5. Discussion grown. In part, this could be attributed to the interrelationships
that exist. Financial performance can be improved by generating
Hotel performance measurement attracts widespread attention strategies that enhance sales, customer satisfaction and customer
from hospitality scholars, and despite the overall upward trajec- loyalty. Internal business processes can correlate positively with
tory significant gaps remain. The findings show that the keywords customers and finance, and customers are positively correlated
of hotel, BSC and performance generates only 2.3% of the total with finance (Kaplan and Norton, 2004). Internal business pro-
5918 published articles. This observation is similar to Li (2008), cesses can enhance the value creation process, and innovation and
who found that only 2% of the total 4917 published articles were learning is an important component of this.
entrepreneurship-related. Internal business processes was a popular area during the earlier
The need for hoteliers to consider quantitative and qualitative stages of the review. New insights into perspectives were advocated
metrics remains a matter of intense debate. The results of the study in Brander Brown and McDonnell (1995). Phillips (1999) considers
provide evidence of the gap in the literature in intangible asset inputs, processes, environment, strategic orientation, and outputs.
measurement. Despite the encouraging trend of the innovation Denton and White (2000) states the relevance of non-financial per-
and learning perspective, the hypotheses for the other intangible formance measures and the need to balance internal and external
perspectives of customer and internal business process were not perspectives. This research during the 1990s highlights a number
supported. of organizational implications such as the need to broaden staff

Financial indicators Customer indicators

70% 70%

60% 60%

50% 50%

40% 40%

30% 30%

20% 20%

10% 10%

0% 0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Internal Business indicators Innovaon & Learning indicators

70% 70%

60% 60%

50% 50%

40% 40%

30% 30%

20% 20%

10% 10%

0% 0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Fig. 2. Trends on balance scorecard perspectives.

 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159 157

Europe Asia
80% 80%
70% 70%
60% 60%
50% 50%
40% 40%
30% 30%
20% 20%
10% 10%
0% 0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

America
80%
70%
60%
50%
40%
30%
20%
10%
0%
92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11

Fig. 3. Trends on geographical scope.

involvement beyond financial executives to a range of senior man- 6. Implication for research and practice
agers (Brander Brown and McDonnell, 1995), involving all levels of
management (Phillips, 1999), need to motivate managers (Denton Concerning a future research agenda, the study identified three
and White, 2000). gaps. Some relatively unexplored BSC perspectives still exist, pri-
The industrial age led to the emergence of strong manufacturing marily the internal business perspective. This research area attracts
models (Ford, 1922) and the specialization of labour (Taylor, 1911). less than one-fifth of total hotel performance papers, illustrat-
After the Second World War, globalisation became an economic ing the relevance of revenues in an industry dominated by fixed
priority with the development of more sophisticated approaches cost and fixed capacity. However the current economic crisis and
to management (Bititci et al., 2011). During the past two decades uncertain trends for some tourism areas, such as Europe and North
the service economy has evolved to become the dominant con- America, suggest a possible integration between sales and costs.
tributor to Gross Domestic Product. Performance measurement has Efficiency could become of greater importance as a key driver for
had to keep pace with developments from its earlier origins in cost managers, both in the present and in the future.
accounting. Hotels too have had to keep pace. Hotel performance The second gap is more focused on hotel performance research
and management practices are now commonplace, but as the world beyond any specific BSC perspective. Hotel performance scholars
as we know continues to change, innovation and learning takes on have found some important empirical results, but no broad theo-
greater importance. The growth in the number of papers focusing retical frameworks have yet emerged. Without a broad theoretical
on innovation and learning is evidence that research is trying to framework, it will be difficult for hotel performance research to
keep pace with economic developments. build on prior studies, or to highlight results, which are comple-
The hotel sector follows economic cycles and during the period mentary or contradictory. This gap requires a movement from a
of review there has been boom and bust. During the boom periods single perspective to relationships that link all perspectives. If the
hoteliers are seeking to get the maximum returns from their invest- hotel firm is a system that cannot be seen as a “simple” (linear)
ments, and during bust periods survival is a priority. Instead of composition of the entities composing it (Baggio and Sainaghi,
merely focusing on innovation in term of the hotel product, inno- 2011; Zahra and Ryan, 2007), then researchers should understand
vation needs to become part of everyday business. Hjalager (1998) the complexity of linking the perspectives. This is an unexplored
asserts that the ability to deliver superior hotel service is usually a research area.
consequent of innovation made to the provision process. The last gap relates with geographic scope. A firm is basically a
Within the context of geographical scope, globalisation of edu- community of people, profoundly deep with economic, social and
cation and academic research is evident. In Asia, with its huge cultural environment. If in the long run the firm’s survival is linked
population researchers are making a significant contribution to the with its ability to generate revenues higher than costs and inflows
hotel performance literature. America is increasing in its contri- larger than outflows, the alternative strategies to dynamically cre-
bution, in contrast with Europe, which appears to have reached a ate equilibrium are many and different. The increasing volume of
platitude. A key observation is the influence of Asian studies in the Asiatic case studies can help managers and academicians to under-
theoretical development of hotel performance. stand the relevance placed by emerging economies, and to compare
Overall, researchers have recognised the benefits of includ- different “accents” characterizing European, American and Asiatic
ing financial and non-financial indicators. Yet, more research is models to measure and manage hotel performance.
required in this area in order to offer hotel organisations better According to our research findings, some of the salient manage-
approaches to the management of their performance. rial implications are summarised as follows.
158 R. Sainaghi et al. / International Journal of Hospitality Management 34 (2013) 150–159

First, based on the BSC perspectives managers should be seeking and organisational capital, employee performance and satisfac-
to broaden the scope of perspectives that they use. Innovation and tion). An effective BSC will articulate the strategic direction of
learning was the only perspective to increase significantly during the hotel company, the motivation for that strategic direction and
the two-decade review period. Given the important role metrics how it will address key stakeholders’ needs. Ultimately, this should
can play in helping a hotel gain competitive advantage, some focus improve hotel performance.
on innovation and learning will help managers focus on the key Finally some remarks about limitations of this study. Our
elements of their strategy. Rigby and Bilodeau (2011) highlight research is based on a sample identified by keywords applied
growth as the number one priority for respondents participating to seven leading hospitality and tourism journals. Despite, the
in the Bain & Company management tool survey. Sustaining prof- research methodology being used in prior studies, some relevant
itable growth during economic downturns is difficult to achieve. papers that did not match our criteria maybe omitted.
Innovation processes with effective metrics properly managed can
deliver profitable growth. Acknowledgments
Second, the traditional focus on financial measures, which were
the focus of earlier BSC studies and practice need updating. Non- We would like to thank the anonymous referees of the Inter-
financial measures dealing with intangible assets should be the national Journal of Hospitality Management for their valuable
focus of modern hotel performance measurement. Effective man- comments.
agement of intangible assets can lead to the delivery of high quality
services, which is a prerequisite for competitive advantage in the
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