The Operating Mechanisms of Hotel Associations and Their Evolution: A Case Study of the Guangzhou Hotels Association.

Associations are playing an increasingly important role in the development of the hotel industry. They can maintain market fairness, save transaction costs, and protect the legitimate rights and interests of market players. With the development of China's market economy, the government is also active in encouraging and nurturing social associations; in fact, some of the functions of government are beginning to be transferred to such associations. However, in existing domestic conditions there are many difficulties facing the development of hotel associations. This paper uses the Guangzhou Hotels Association as a case to study such associations' operational mechanisms and their changes over time. The aim is to identify the root causes of problems in the development of hotel associations, and to propose strategies to solve such problems. The Guangzhou Hotels Association was established on May 6 1988, with 42 members covering the whole area of Guangzhou. Although currently only 10% of hotels in Guangzhou are members of the Guangzhou Hotels Association, the association has a significant influence on the tourism industry due to the scale of its assets, total number of rooms, and income. Through theoretical analysis and empirical research this paper outlines the definition, nature and functions of hotel associations, and discusses the implementation of sector management and industry self-regulation from the perspective of new institutional economics. Methods used in this study included field work in the hotels, the collection of relevant papers on the basic concepts of association, and an analysis of the contents of the Guangzhou Hotels Association's magazines, conference materials, etc. From March to April 2011, fieldwork was conducted in the secretariat of the association at which the daily operations of the association were observed and materials relating to the association's work were collected. Subsequently, two employees of the association and twenty senior executives of member hotels were interviewed to determine their perceptions of changes in the association and their understanding of association functions. The paper proposes the following actions based on the results. First, the major management problem of the association is that it currently cannot be separated from the government. Accordingly, the government needs to take the lead in proposing management innovations for hotel associations, to accelerate the separation between government and the association, and transfer more of its management functions to the association. Second, hotel associations should be bold and innovative, and can build an organizational structure suitable for its geographical location and the development of the hotel industry, and enrich the functions it can offer to industry. By implementing these actions, hotel associations could provide better services for member hotels and promote management specialization within hotels. Based on these considerations, this paper provides a systematic understanding of the management theory and practices of the Guangzhou Hotels Association, which can provide an experiential reference for the development of other hotel associations as well as for local tourism associations. At the same time, this study revealed limitations in the current operational mechanisms of associations. First, there are negative effects resulting from the current role and management ability of hotel associations and these may reduce the efficiency and flexibility of business operations in the hotel industry in the future. Second, the development of hotel association operating mechanisms is often accompanied by the transfer of governance functions as well as by administrative restructuring. Future research should examine how the transfer of governance functions can be best carried out, including the pros and cons during the process of function transferring. [ABSTRACT FROM AUTHOR]