Hotel networks and social capital in destination marketing

Purpose – The paper provides insights into destination marketing and the conditions and outcome of competitor co-operation in a local, horizontal hotel network. The specific purpose is to uncover the mechanics of such a network and offer a theory together with recommendations for practice and future research. Design/methodology/approach – In contrast with manufactured goods, which are distributed to the market, destination marketing distributes customers to a service production site. This basic prerequisite has effects on marketing strategies and the networking of competitors, and so has the fact that the services are in part delivered in interaction with customers and between customers at a physical place. The paper is based on inductive case study research, and the observations and conclusions from the empirical case data are given precedence over extant theory. The case, the Hotel Group, is a hotel network in the town of Ostersund, Sweden. The case is directed towards certain strategic business-to-business elements of destination marketing. Findings – The study shows that the Hotel Group has found a success formula. Among the results are that a drive for action, both planned and improvised, is more decisive for success than plans and expressed intentions; that networking is facilitated when local competitors build social capital through trust and commitment in action; and that competitors have to adhere to certain basic principles, strike a balance between seemingly contradictory strategies, and live by an agreed code of conduct. Research limitations/implications – The case study lays bare the need to rethink certain mainstream vantage points used in research. These include departure from the notion of small- and medium-sized businesses as autonomous economic entities and consider them part of networks; recognition of the social context and synergy of a network organization and its code of conduct; and learning to manage a social network by balancing seeming paradoxes and opposites. The study is temporally limited and does not forecast the sustainability and robustness of the network and its success formula over time and under changing conditions. Practical implications – The study offers normative and actionable insights about the success of a horizontal tourism network. The network members should adhere to three basic principles: show enthusiasm, give time, and contribute to financing; they have to perform balancing acts between the collective and individual, co-operation and competition, and planning/intention and action; and they have to follow a seven-point code of conduct. Originality/value – The paper contributes to a theory of co-operation in marketing networks. It empirically examines network mechanics when local competitors take action to improve their individual situation by improving the collective competitive position on the market, provides insights into destination marketing and the conditions and outcome of competitor co-operation in a local, horizontal hotel network.