Valuing brand equity of a geographic region

Tim Brailsford, Stephen Dash, Marion Hutchinson, Ravi Pappu, Brent W. Ritchie

Research output: Contribution to journalArticleResearchpeer-review

1 Citation (Scopus)

Abstract

There is much anecdotal evidence and academic argument that the location of a business influences its value. That is, some businesses appear to be worth more than others because of their location. This is particularly so in the tourism industry. Within the domain of the destination literature, many factors can be posited on why business valuation varies, ranging from access to markets, availability of labor, climate, and surrounding services. Given that business value is such a fundamental principle that underpins the viability of the tourist industry through its relationship with pricing, business acquisition, and investment, it is surprising that scant research has sought to quantify the relative premium associated with geographic locations. This study proposes a novel way in which to estimate geographic brand premium. Specifically, the approach translates valuation techniques from financial economics to quantify the incremental value derived from businesses operating in a particular geographic region, and produces a geographic brand premium. The article applies the technique to a well-known tourist destination in Australia, and the results are consistent with a positive value of brand equity in the key industries and are of a plausible order of magnitude. The article carries strong implications for business and tourism operators in terms of valuation, pricing, and investment, but more generally, the approach is potentially useful to local authorities and business associations when deciding how much resource and effort should be devoted to brand protection.

Original languageEnglish
Pages (from-to)765-779
Number of pages15
JournalTourism Analysis
Volume14
Issue number6
DOIs
Publication statusPublished - 2009
Externally publishedYes

Fingerprint

equity
valuation
industry
tourism
tourist destination
Brand equity
Geographic regions
viability
labor
Premium
market
climate
resource
economics
Pricing
Industry
premium

Cite this

Brailsford, T., Dash, S., Hutchinson, M., Pappu, R., & Ritchie, B. W. (2009). Valuing brand equity of a geographic region. Tourism Analysis, 14(6), 765-779. https://doi.org/10.3727/108354210X12645141401188
Brailsford, Tim ; Dash, Stephen ; Hutchinson, Marion ; Pappu, Ravi ; Ritchie, Brent W. / Valuing brand equity of a geographic region. In: Tourism Analysis. 2009 ; Vol. 14, No. 6. pp. 765-779.
@article{40cd2d84b3614a10b4f460835552222d,
title = "Valuing brand equity of a geographic region",
abstract = "There is much anecdotal evidence and academic argument that the location of a business influences its value. That is, some businesses appear to be worth more than others because of their location. This is particularly so in the tourism industry. Within the domain of the destination literature, many factors can be posited on why business valuation varies, ranging from access to markets, availability of labor, climate, and surrounding services. Given that business value is such a fundamental principle that underpins the viability of the tourist industry through its relationship with pricing, business acquisition, and investment, it is surprising that scant research has sought to quantify the relative premium associated with geographic locations. This study proposes a novel way in which to estimate geographic brand premium. Specifically, the approach translates valuation techniques from financial economics to quantify the incremental value derived from businesses operating in a particular geographic region, and produces a geographic brand premium. The article applies the technique to a well-known tourist destination in Australia, and the results are consistent with a positive value of brand equity in the key industries and are of a plausible order of magnitude. The article carries strong implications for business and tourism operators in terms of valuation, pricing, and investment, but more generally, the approach is potentially useful to local authorities and business associations when deciding how much resource and effort should be devoted to brand protection.",
author = "Tim Brailsford and Stephen Dash and Marion Hutchinson and Ravi Pappu and Ritchie, {Brent W.}",
year = "2009",
doi = "10.3727/108354210X12645141401188",
language = "English",
volume = "14",
pages = "765--779",
journal = "Tourism Analysis",
issn = "1083-5423",
publisher = "Cognizant Communication Corporation",
number = "6",

}

Brailsford, T, Dash, S, Hutchinson, M, Pappu, R & Ritchie, BW 2009, 'Valuing brand equity of a geographic region' Tourism Analysis, vol. 14, no. 6, pp. 765-779. https://doi.org/10.3727/108354210X12645141401188

Valuing brand equity of a geographic region. / Brailsford, Tim; Dash, Stephen; Hutchinson, Marion; Pappu, Ravi; Ritchie, Brent W.

In: Tourism Analysis, Vol. 14, No. 6, 2009, p. 765-779.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - Valuing brand equity of a geographic region

AU - Brailsford, Tim

AU - Dash, Stephen

AU - Hutchinson, Marion

AU - Pappu, Ravi

AU - Ritchie, Brent W.

PY - 2009

Y1 - 2009

N2 - There is much anecdotal evidence and academic argument that the location of a business influences its value. That is, some businesses appear to be worth more than others because of their location. This is particularly so in the tourism industry. Within the domain of the destination literature, many factors can be posited on why business valuation varies, ranging from access to markets, availability of labor, climate, and surrounding services. Given that business value is such a fundamental principle that underpins the viability of the tourist industry through its relationship with pricing, business acquisition, and investment, it is surprising that scant research has sought to quantify the relative premium associated with geographic locations. This study proposes a novel way in which to estimate geographic brand premium. Specifically, the approach translates valuation techniques from financial economics to quantify the incremental value derived from businesses operating in a particular geographic region, and produces a geographic brand premium. The article applies the technique to a well-known tourist destination in Australia, and the results are consistent with a positive value of brand equity in the key industries and are of a plausible order of magnitude. The article carries strong implications for business and tourism operators in terms of valuation, pricing, and investment, but more generally, the approach is potentially useful to local authorities and business associations when deciding how much resource and effort should be devoted to brand protection.

AB - There is much anecdotal evidence and academic argument that the location of a business influences its value. That is, some businesses appear to be worth more than others because of their location. This is particularly so in the tourism industry. Within the domain of the destination literature, many factors can be posited on why business valuation varies, ranging from access to markets, availability of labor, climate, and surrounding services. Given that business value is such a fundamental principle that underpins the viability of the tourist industry through its relationship with pricing, business acquisition, and investment, it is surprising that scant research has sought to quantify the relative premium associated with geographic locations. This study proposes a novel way in which to estimate geographic brand premium. Specifically, the approach translates valuation techniques from financial economics to quantify the incremental value derived from businesses operating in a particular geographic region, and produces a geographic brand premium. The article applies the technique to a well-known tourist destination in Australia, and the results are consistent with a positive value of brand equity in the key industries and are of a plausible order of magnitude. The article carries strong implications for business and tourism operators in terms of valuation, pricing, and investment, but more generally, the approach is potentially useful to local authorities and business associations when deciding how much resource and effort should be devoted to brand protection.

UR - http://www.scopus.com/inward/record.url?scp=84907676499&partnerID=8YFLogxK

U2 - 10.3727/108354210X12645141401188

DO - 10.3727/108354210X12645141401188

M3 - Article

VL - 14

SP - 765

EP - 779

JO - Tourism Analysis

JF - Tourism Analysis

SN - 1083-5423

IS - 6

ER -

Brailsford T, Dash S, Hutchinson M, Pappu R, Ritchie BW. Valuing brand equity of a geographic region. Tourism Analysis. 2009;14(6):765-779. https://doi.org/10.3727/108354210X12645141401188