Deciphering hotel chain diffusion

Abstract

This study examines the diffusion dynamics of 12,396 hotels across seven major Chinese economy hotel chains over two decades. We operationalize three diffusion types—relocation, hierarchical, and contagious—and measure their interactions to reveal complex expansion patterns. Contagious diffusion emerges as the dominant mode, especially during saturation phases where it accounts for over 90 percent of new openings. However, successful contagious growth typically follows relocation and hierarchical moves that secure initial footholds. Spatially and temporally, diffusion is strategic and nonuniform, concentrating in core cities. Notably, brands such as Hanting and Home Inn deviated from the classic S-curve by re-expanding in previously saturated markets, underscoring a multi-staged, dynamic process. By integrating spatial and temporal perspectives, this research advances diffusion theory and underscores the interdependence of diffusion modes. Our findings offer actionable guidance for hotel chains aiming to tailor expansion strategies to brand positioning and diverse market characteristics.