ARTICLE IN PRESS

Tourism Management 26 (2005) 549–560

The relationship between brand equity and firms’ performance in luxury hotels and chain restaurants$
Hong-bumm Kima,1, Woo Gon Kimb,* b a College of Hospitality & Tourism, Sejong University, Kwang-jin Gu, Gun-ja Dong 98, Seoul 143-747, Republic of Korea School of Hotel and Restaurant Administration, Oklahoma State University, 210 HESW, Stillwater, OK 74078-6173, USA

Received 27 February 2004; accepted 4 March 2004

Abstract There is a growing emphasis on building and managing brand equity as the primary drivers of a hospitality firm’s success. Success in brand management results from understanding brand equity correctly and managing them to produce solid financial performance. This study examines the underlying dimensions of brand equity and how they affect firms’ performance in the hospitality industry—in particular, luxury hotels and chain restaurants. The results of this empirical study indicate that brand loyalty, perceived quality, and brand image are important components of customer-based brand equity. A positive relationship was found to exist between the components of customer-based brand equity and the firms’ performance in luxury hotels and chain restaurants. A somewhat different scenario was delineated from the relationship between the components of customer-based brand equity and firms’ performance in luxury hotels and chain restaurants. r 2004 Elsevier Ltd. All rights reserved.
Keywords: Customer-based brand equity; Firms’ performance; Chain restaurants; Luxury hotels; Brand awareness

1. Introduction Brands have been increasingly considered as primary capital for many businesses. Financial professionals have developed the notion that a brand has an equity that may exceed its conventional asset value. Indeed, the cost of introducing a new brand to its market has been approximated at $100