Wednesday
April 23, 2014

Homework Help: Economics

Posted by AAAAA on Monday, June 24, 2013 at 3:26am.

6. An article in The Wall Street Journal reported that large hotel chains, such as Marriott, are tending to reduce the number of hotels that they franchise to outside owners and increase the number the chain owns and manages itself. Some chains are requiring private owners or franchisees to make upgrades in their hotels, but they are having a difficult time enforcing the policy. Marriott says this upgrading is important because “we’ve built our name on quality.”
a. What type of agency problem is involved here?
b. Why would Marriott worry about the quality of hotels it doesn't own but franchises?
c. Why would a chain such as Marriott tend to own its hotels in resort areas, such as national parks, where there is little repeat business, and franchise in downtown areas, where there is a lot of repeat business? Think of the reputation effect and the incentive of franchises to maintain quality.

Answer this Question

First Name:
School Subject:
Answer:

Related Questions

economics - In the article about the financial problems of USA Today, Newsweek ...
home economics - In an article about the financial problems of USA Today, ...
ECONOMICS - In an article about the financial problems of USA Today, Newsweek ...
economics - 1. In an article about the financial problems of USA Today, ...
economics - In an article about the financial problems of USE Today, Newsweek ...
Managerial Economics - In an article about the financial problems of USA Today...
Manageral Economics (Economyst Only Please) - In an article about the financial ...
economics - . Suppose you are a stock market analyst specializing in the stocks ...
stats - The vice-president of a business firm has reviewed the records of the ...
managerial economics - When McDonald's Corp. reduced the price of its Big Mac by...

Search
Members