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The strategic value of advertising expenditures in the tourism and hospitality industry

Author

Listed:
  • Rui Qi

    (The University of South Carolina, USA)

  • David A Cárdenas

    (The University of South Carolina, USA)

  • Xichen Mou

    (The University of South Carolina, USA)

  • Simon Hudson

    (The University of South Carolina, USA)

Abstract

The purpose of this study is to investigate the strategic value of advertising expenditures in the tourism and hospitality industry. Adopting a market-based valuation approach and longitudinal analysis, this study assesses the magnitude of advertising value by comparing the magnitude of the value with those from other expenses and book value. Results show that the economic benefits from advertising expenditures, unlike other expenses, don’t expire in the current period. Furthermore, advertising expenditures are significant strategic investments in intangible assets, providing greater future economic benefits than other assets. In addition, there is no significant heterogeneity regarding the effectiveness of advertising expenditures across subsectors in the tourism and hospitality industry.

Suggested Citation

  • Rui Qi & David A Cárdenas & Xichen Mou & Simon Hudson, 2018. "The strategic value of advertising expenditures in the tourism and hospitality industry," Tourism Economics, , vol. 24(7), pages 872-888, November.
    • Handle: RePEc:sae:toueco:v:24:y:2018:i:7:p:872-888
    DOI: 10.1177/1354816618786845
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    References listed on IDEAS

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