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 The current issue and full text archive of this journal is available on Emerald Insight at:
https://www.emerald.com/insight/2514-9792.htm

Critical success factors for virtual CSFs of VHO in

SMS hotels
hotel operator partnership
with small- and medium-sized
hotels: perspectives of owners
and operators Received 15 June 2022
Revised 13 September 2022
19 November 2022
Fajar Kusnadi Kusumah Putra 28 November 2022
19 March 2023
Department of Hospitality, NHI Bandung Tourism Polytechnic, 6 April 2023
Bandung, Indonesia, and Accepted 9 April 2023

Rob Law
Department of Integrated Resort and Tourism Management,
Faculty of Business Administration,
Asia-Pacific Academy of Economics and Management, University of Macau,
Taipa, Macao

Abstract
Purpose – This paper identifies the critical success factors (CSFs) of virtual hotel operator (VHO) in using hotel
management system partnerships with small- and medium-sized hotels (SMSHs).
Design/methodology/approach – This study uses a qualitative approach, with 25 semi-structured
interviews with hotel owners and VHO management. Thematic analysis is used to determine themes to
evaluate hotel owners and operators’ perceptions.
Findings – CSFs for VHO partnership with SMSHs include marketing and promotion strategies, client
relationships, training and human resources development, hotel operation management, innovation strategies,
capital expenditures and property management systems (PMSs). VHOs also have a symbolic impact on the
mutualistic relationship with SMSHs by increasing service and enhancing product competitiveness and
profitability.
Research limitations/implications – Findings are beneficial for VHO in determining the most significant
CSFs, thereby establishing additional metrics in business performance and increasing resilience in the
accommodation sector. Further studies can measure the digital technology factors from VHO, including PMSs
and mobile applications.
Originality/value – This study first identifies CSFs for VHO companies from the perspectives of hotel owners
and management. This contribution adds to the literature on CSFs in the context of digital technology
implementation in SMSHs. Moreover, implications are beneficial for VHO management in determining the most
significant CSFs for companies to measure the business performance of the companies and increase resilience
in the accommodation sector.
Keywords Critical success factors, Hotel management partnership, Small-and medium-sizes hotels,
Smart technology innovation, Virtual hotel operator
Paper type Research paper

1. Introduction
Technological growth in the travel and tourism sector has affected how the hotel business
effectively connects customers and markets its products and services. Hotel smart technology
is a term used to describe the use of technology in hotels to improve efficiency, reduce costs
and enhance customer experience (Buhalis et al., 2019). In a markedly competitive business
Journal of Hospitality and Tourism
Insights
Funding: Financial support for this study was provided by a grant from The Indonesia Endowment © Emerald Publishing Limited
2514-9792
Funds for Education (LPDP), the Ministry of Finance, Republic of Indonesia. DOI 10.1108/JHTI-06-2022-0244
JHTI era, small- and medium-sized hotels (SMSHs) should prioritize innovation in managing hotels
by adopting digital technology strategies (Dieguez et al., 2022). SMSHs should allocate a
budget for information systems to update their technology with their daily operations and
maintain the data management process (Buhalis and Leung, 2018; Yadegaridehkordi et al.,
2018). Hotels not adapting to new market conditions and forming alliances will face
operational shortcomings. Single properties also have limited opportunities to benefit from
considerably extensive referral programs and international marketing campaigns, unlike
those for chain and affiliated hotels (Ivanova and Rahimi, 2016; Mohammad, 2016). This
technological growth (and performance gap) eventually led to the emergence of a new
technology-based hospitality management business called virtual hotel operator (VHO).
VHO are a type of smart hotel management companies that utilizes software that can be
used to manage and operate hotels. VHO use technology to create service/product, marketing,
process and organizational innovations (Wiastuti and Susilowardhani, 2017; Han et al., 2021;
Elshaer and Marzouk, 2022). These companies provide customers with an efficient and cost-
effective way to book rooms and manage their stay. They also offer online booking, customer
service support, housekeeping services and mobile-based application for guests and their
hotel partners. OYO and Reddoorz are examples of VHO providing their customers with an
efficient, cost-effective way to book and manage their rooms. VHO accelerate the region’s
online travel ecosystem and provide solutions for hotel owners and customers looking for
quality and price-standardized accommodation (Anandan et al., 2016).
VHO create more value for hotel owners and help them develop and transform their
businesses through technology adoption, staff training, standard operation, interior design,
marketing strategies, promotional materials and customer service (Wiastuti and
Susilowardhani, 2017; Nugroho and Hati, 2020; Prakarsa et al., 2020; Arreza, 2022). This
form of a co-evolutionary business system is characterized by relationships among
technologies, institutions and actors, including end-users or customers and communities
throughout the entire network (Aarikka-Stenroos and Ritala, 2017).
However, the partnership between VHOs and SMSHs experiences specific challenges:
most SMSHs involved lack any experience in using technology for hotel management
systems, have low budget for innovation and lack strategic vision, management expertise
and ability to utilize technology for their presence on online distribution channels (Smithson
et al., 2011; Mohammad, 2016; Yin et al., 2019; Fjellstr€om et al., 2020).
However, the most prominent issue is identifying and measuring critical success factors
(CSFs) for VHO and SMSH partnership. As VHOs expand in the SMSHs market, VHO
management should also be surveyed on how they operate, measures their performance and
maintain their partnership with hotels. However, empirical research on VHOs has remained
scarce. Previous studies on VHOs have discussed the nature of their businesses (Sharma et al.,
2017; Wiastuti and Susilowardhani, 2017), customer perceptions of VHOs (Kurnia and
Sulistiani, 2019; Nugroho and Hati, 2020) and technology application (Prakarsa et al., 2020).
Only a few discussions have revealed the success factors that benefit the entire network and
transform the SMSHs business (Arreza, 2022). Previous studies have also failed to consider
the critical role of VHO stakeholders (i.e. management and hotel partners). Ultimately, these
gaps are what the current study seeks to fill in.
The current study identifies critical factors contributing to the success of VHOs in
partnership with SMSHs. Morrison and Thomas (1999) explained that SMSHs have a small
business scope: they are self-managed by owners and financed by individuals or small
groups. Most properties are owned and managed by those without previous hotel
management backgrounds. Therefore, they struggle to maintain quality service standards
and face many challenges, such as competition level, operational costs, technical and
management skills, appropriate e-business solutions and ownership of information
communication technology (ICT) equipment (Pine et al., 2000; Buhalis and Kaldis, 2008).
 This study will contribute to the literature on technology use in hospitality management, CSFs of VHO in
particularly in the context of its adoption by SMSHs. These results ultimately enrich the available SMS hotels
scholarly perspectives on hotel management agreements, partnerships between owners and
operators, brand affiliations and hotel operators. Hotel owners must understand their perspectives
toward partnership with VHOs, collaboration between VHOs and SMSHs ushers future
competition and consolidation. Subsequent sections will discuss the theoretical background of
VHOs, CSFs and methodology, results and discussion. The final section provides the conclusion,
theoretical and managerial implications and recommendations for future research.

2. Literature review
2.1 VHOs
Since its first appearance in 2013, VHOs have constantly evolved as a new player in the hotel
industry as an asset-light type of business. VHOs focus on developing business-to-business
(B2B) partnerships with SMSHs, with companies continuing to expand and attract new
investors (Wiastuti and Susilowardhani, 2017; The Economic Times, 2018; Russel, 2019).
Hotel owners partnering with VHOs adopt a management and franchise model. The two
categories of this model are leases and franchises. Leases involve property owners buying
brand franchises, managed directly by VHOs with royalty fees. Franchises involve owners
cooperating with the rental scheme or revenue-sharing for rooms booked via VHO platforms.
VHO management system includes various hotel management developments, such as
technology adoption, staff training, standard operation, interior design, room decoration,
standardized furniture, marketing strategies, promotional materials and customer service
through their customer and hotel owners’ mobile applications.
Most VHOs provide hotel standards and guidelines that help management teams
transform a property while calculating estimated costs and monitoring renovation processes
(Oravel Stays, 2018). Sharma et al. (2017) explained that eight stages are involved in the VHO
hotel property listing process. First, the transformation process begins with business
development managers identifying potential properties. Second, detailed audit and
negotiation with hotel owners are involved. VHOs will share specific characteristics, such
as quality assurance inspection. Third, hotel partners must meet the quality specifications set
by the VHO management before a partnership agreement. Fourth, orientation and integration
with VHO standardized facilities (e.g. hot showers, clean linen and towel, air conditioners,
Wi-Fi and in-room amenities) are conducted. Fifth, VHO business development managers
prepare the transformation process, followed by VHOs providing capital expenditure to
improve facilities and hotel buildings. Lastly, the final process involves hotel properties going
live on VHO websites, mobile applications and other distribution channels. After the
transformation, operational teams maintain the standard and train hotel employees to use the
property management system (PMS) and managing daily hotel operations. Although VHOs
offer various advantages in technology along with the standardization of hotel management,
they remain in the development stage. Therefore, their CSFs should be identified.

2.2 CSFs for hotels

CSFs have become an essential concept concerning hotel goals and objectives in the hotel and
accommodation sector. Brotherton and Shaw (1996) described CSFs as activities and
processes supporting organizational goals. In turn, they should be actionable, controllable
and measurable. CSFs are also sector-specific – the implication is that focused research in a
sector on CSFs should provide specific recommendations for businesses and entrepreneurs
(Engelbrecht et al., 2014).
CSFs have become essential in hotel goals and objectives in the hotel and accommodation
sector. With increasingly fierce competition and inevitable use of technology, companies need
JHTI innovative strategies to achieve their goals (Avcikurt et al., 2011). Brotherton and Shaw (1996)
explained that CSFs in hospitality services could be categorized on the bases of technical or
human aspects. Technical and human aspects are considered integral to corporate culture,
cooperation, management style, company performance, productivity and business metrics in
achieving company goals (Politis et al., 2009; Arasli, 2012; Padilla-Melendez and Garrido-
Moreno, 2014; Spencer and Van Zyl, 2015; Yadegaridehkordi et al., 2018).
Diversification standards of the hotel business have also changed rapidly. However, the
literature’s insufficiency highlights the paucity of knowledge on CSFs related to VHOs and
partnership with SMSHs. CSFs in hotel operations from the customer perspectives have also
been explored (Padilla-Melendez and Garrido-Moreno, 2014; Wang and Hung, 2015; Fuentes-
Medina et al., 2018; Lee et al., 2019), with some studies explicitly outlining the context of
SMSHs (Avcikurt et al., 2011; Zhang et al., 2013; Wang and Hung, 2015). However, only a few
studies have discussed the concept of CSFs for VHOs. Most studies use a quantitative method
approach (Avcikurt et al., 2011; Wang and Hung, 2015; Ahmad and Arif, 2016), which enables
obtaining more participants. However, it cannot explore the respondents’ views in a markedly
in-depth manner.

2.3 CSFs influencing joint ventures in the hospitality business

Partner selection is a primary factor in achieving success in establishing joint ventures (JVs).
International JVs (IJVs) are among the most common forms of market entry companies use for
their internationalization processes. When creating IJVs, trust, commitment and congruent
goals are highlighted as important factors in relationships. They are essential for their
success (E Silva and Oliveira, 2017). Similarity in partners’ corporate values and missions has
become a significant impetus in developing competitive service strategies. This congruence is
supported by building mutual trust, synergetic effects of using resources, strong financial
background and equity sharing and information exchange and knowledge sharing with local
partners. Efficiency in strategic and marketing planning, experience in market research
activities and exceeding customers’ expectations and needs are critical to these alliances’
success (Li et al., 2006; Magnini, 2008; Lee et al., 2013).
Cooperation between hotel businesses and affiliation with chain hotel brands create
associations in customers through several strategies, such as assessing customer reviews,
contacting the target market, offering benefits to members and offering a corporate contract/
rate for groups or companies (Resende et al., 2018). Negotiating and operating managed hotels
are complex processes, in which owners and operators must agree on various issues. All
parties involved must understand the agreement and the other partners’ perception of it (Van
Ginneken et al., 2019). Contractor and Kundu (1998) identified five critical factors when
choosing an international hotel alliance: economies of scale, firms’ ability to exercise
management control and maintain quality, need for size in global operation, reservation
system and investments in training.
Industry challenges include competitive pricing, better marketing and promotion
methods, improved quality of facilities, enhanced service delivery, customer service by
maintaining good customer relationships, improving the quality and variety of products
offered (i.e. cleanliness, technology, facilities) and loyalty schemes used to retain customers
(Ahmad and Arif, 2016). Inter-relationship among hotel management companies and hotel
owners should be based on cooperative relationships to overcome these limitations. Hence,
business strategies adopted by SMSH owners include but not limited to strengthening the
market position of small hotel businesses through various strategies, such as branding,
product comparison, service technology and themes that contribute to the overall image-
building of a small hotel business. Factors associated with image-building include hotel
design, management philosophy, commitment to quality and consistency in service delivery
and use of smart technology innovation for increased competitiveness and business CSFs of VHO in
performance (Fredrick, 2019; Lee and Lee, 2020; Nunkoo et al., 2020; Dieguez et al., 2022). SMS hotels
The current study’s literature review reveals three CSFs for hotels. The first is human and
technical aspects, level of service quality, financial performance and marketing (Brotherton
and Shaw, 1996; Avcikurt et al., 2011; Yadegaridehkordi et al., 2018). The second is customer
relationship management (CRM), information and technology, knowledge management
capability, customer orientation and organizational readiness (Arasli, 2012; Padilla-Melendez
and Garrido-Moreno, 2014). The third is the physical environment, including the hotels’
interior and exterior, leading to customer satisfaction (Yadegaridehkordi et al., 2018).
Progress and opportunities abound when exploring CSFs in hotels. Yadegaridehkordi
et al., (2018) proposed four aspects that influence the performance and growth of small hotels.
The first is the organizational aspect, including top management support and financial
performance. The second is human resources, which include employee preparation, education,
service standardization, quality and customer satisfaction. The third is environmental
atmosphere, including hygiene and cleanliness, interior and exterior architecture and location.
Fourth is information and technology, encompassing firms’ external and internal technologies
and benchmarking with process and equipment standardization.

3. Methodology
3.1 Research design
Exploratory research is needed to understand hotel owners’ perspectives and VHOs’
management on their partnerships to identify CSFs for VHOs. The qualitative approach is a
“well-established approach to researching phenomena in the social sciences, and its emphasis
is on empathetic understanding, especially regarding the ‘how’ and ‘why’ of tourism-related
phenomena and experiences” (Dwyer et al., 2012, p. 312). Purposive sampling was used to
select relevant participants able to answer specific research purposes (Patton, 2014). Given
that the study focused on developing VHOs in Indonesia, the sampling focused on key
participants from Indonesian VHO management and hotel owners. Participants were
recruited via different procedures prior to the fieldwork. First, VHO management was invited
based on the company’s affiliation accounts on the social network platform LinkedIn; the
platform “connects professionals in various fields and, therefore, provides greater ability to
target data collection to an appropriate social network” (Dusek et al., 2015, p. 282).
According to Euromonitor International (2018), over 28,230 places of accommodation have
been registered across Indonesia. However, most of these places (88.25%) are not considered
SMSHs and there is still a significant need to standardize SMSH hotel supply in Indonesia.
SMSH properties can be classified as one-, two- and three-star hotels, along with non-star
accommodations, such as guest houses and homestays. Chosen properties had no more than 100
rooms, had 10–49 employees engaged in operations and controlled and funded by an individual
or a small group (Middleton, 1998; Morrison and Thomas, 1999; Ahmad and Arif, 2016).
Semi-structured interviews with open-ended questions were employed to meet the
research objectives. Altinay et al. (2015) explained that these interviews enable participants to
explain their point of view, seek new perspectives, find general trends and understand the
relationships of variables in research. Personal invitations based on the SMSH category
identified herein were used to recruit hotel owners’ participants. SMSHs are classified as non-
star and independently operated hotels, unaffiliated with local or international hotel chains.
A total of 156 research invitations were sent to potential VHO management level. Their
profiles were categorized into three groups: chief executive officer (CEO)/founder/co-founder
(6 profiles), executive management positions (74 profiles) and middle range management
positions (76 profiles). These people had been hired and worked for VHOs. They had been
with VHO companies from six months to seven years. Participants came from various first-
JHTI tier cities in Indonesia (where most VHO properties are located). A total of 16 (3.84%) VHO
management representative were willing to be interviewed. Kwortnik (2003) explained that
the minimum number of research samples suitable for qualitative research projects is 12.
Therefore, this study has reached the criteria mentioned.
The interviews focused on the participants’ experiences, VHO goals and characteristics
and critical factors for VHO success from management and hotel owners. They were
conducted from June to August 2020. Owing to the coronavirus disease 2019 (COVID-19)
pandemic, most were held using online meeting platforms (e.g. Zoom meetings, Google meet).
All the participants’ identities in this study remain anonymous. A total of 16 participants
represented four VHO companies that operated in Indonesia: Airy Rooms, OYO rooms,
Reddoorz and Zen Rooms. These VHO companies represent one of Asia’s most rapidly
expanding types of hospitality management, in which an enormous number of SMSHs
operate. Its core idea is to transform SMSHs and ensure customers’ safety and comfort by
unifying them under their brand name. Meanwhile, nine represented hotel owners (Table 1).
Respondents’ job descriptions in VHOs are connected to hotel operations, business
development, transformation, marketing and human resources.
VHO participants’ experiences ranged from 4 to 18 years of working experience in various
fields (e.g. hotels, resorts, cruise ships or restaurants). Specialties varied from hospitality
backgrounds, such as hotel operations, e-commerce, customer services, revenue

VHO management
IDs Positions Years of experience

M1 Assistant general manager 12 years

M2 E-commerce executives 4 years
M3 Hotel operation manager 7 years
M4 Regional head 14 years
M5 Human resources business partner 11 years
M6 Senior hotel operations manager 18 years
M7 Country manager for hotel operations 15 years
M8 Hotel consultant 13 years
M9 Business development manager 10 years
M10 Operations manager 4 years
M11 Head of business development 9 years
M12 Head of business development 11 years
M13 Head of operation excellence 6 years
M14 Senior business development manager 8 years
M15 Assistant general manager 13 years
M16 Regional corporate sales manager 10 Years

Hotel owners
IDs Occupations Types of accommodation Years of partnership with VHO

O1 Banker Guest house One year

O2 Information technology (IT) Homestay Five years
O3 Hotel manager One-star hotel Four years
O4 Social entrepreneur Two-star hotel Four years
Three-star hotel One year
O5 Human resource manager Three-star hotel One year
O6 Contractor Two-star hotel Three years
O7 Wedding organizer Guest House Two years
O8 Retail Two-star hotel Two years
Table 1. O9 Catering business One-star hotel Three years
Profile of participants Source(s): Authors’ own work
management, sales and marketing, event management, pre-opening and procurement. By CSFs of VHO in
contrast, six other managers came from non-hospitality backgrounds, such as banking, SMS hotels
insurance, consumer goods, retail/sales and human resources.
Nine hotel owners were interviewed. Hotel owners’ educational backgrounds were unrelated
to hospitality, including management, economics, IT and psychology. Most hotel owners were
inexperienced in the hospitality industry: their experiences and specialties were remarkably
diverse. For example, some were wedding organizers, caterers, social entrepreneurs,
salespersons and contractors. Only one participant had experience in managing his/her
family’s hotel business. Accommodation types ranged from the homestay, guest houses and
one-to three-star hotels. The partnership agreement between hotel owners and VHOs lasted one
to five years. The diversity of the participants in this study ultimately helped the
comprehensiveness and diversity of information from the participants’ perspectives.

3.2 Data analysis

From the results of the interview researchers invited the respondents to verify the findings to
improve credibility. The interviewer asked for the participant’s prior and informed consent to
be recorded for data collection. Recorded data were translated and copied (transcription).
Each participant was given a copy of the interview transcript to review data accuracy.
Interviewees agreed and signed the interview protocol and consent form. Thereafter, all
participants signed and returned the member-checking consent form to the researcher.
Recorded interviews were immediately transcribed, lasting an average of 49 min per
participant. ATLAS.ti (version 8), a qualitative data analysis software, was used to analyze
the coding. Thematic analysis searched for commonalities and themes describing the data
(Clarke and Braun, 2017). A theme can be interpreted as an affirmation that creates meaning
or a statement of meaning. Meanings were also obtained from interviews and were
formulated by the researcher.
The current study considered three aspects for reliability (Creswell and Creswell (2017).
The first aspect is triangulation data from multiple sources of participants in the interviews.
This study conducted interviews with two groups of participants: hotel owners and VHO
management. Secondary data reports, online travel trends, hotel statistics and articles on
VHOs were used to complete the current research analysis. Hence, this study’s validity and
reliability were based on data sources.
The second aspect is member checking. Throughout the analysis process, participants
would check their responses through ongoing dialog on interpretations based on the
informant’s checking to ensure the actual meanings of their responses. Member checking
ensures accurate interpretations (Savin-Baden and Major, 2010), involving the participant or
information provider being reconfronted with the interview data. Thereafter, the interviewer
would check with the participants to confirm their responses by sending verbatim
transcripts. Member-checking consent forms were sent to the participants via email and
WhatsApp for faster response.
The third aspect is validity. Each participant was given a copy of the interview transcript
to review data accuracy. Thereafter, the researchers invited the respondents to verify these
findings to improve credibility. The participants were asked to read and correct the summary
of the researcher’s interview results, with participants signing the member checking consent
form if they saw the data as valid.

4. Results and discussion

4.1 Partnership factors
Client relationship is the most critical factor in the success of VHOs (see Table 2). VHOs, as
light assets companies, maintain their property partners to sustain and expand businesses.
JHTI Salient themes Sub themes Key insights

Partnership factors Client relationship The negotiation process and policies on the business
Contract agreement expansion of VHOs in the SMSH sector. The
Constant improvement partnership between both parties maintains the
Adaptation to local culture sustainability of the VHO business model and their
Business development commitment to the contract agreement

Marketing factors Marketing and promotion Marketing is part of functional CSFs, in which
strategies several categories are assessed: effectiveness of
Market segment advertising, market intelligence, customer database
Pricing strategy and competitor intelligence
Branding
Distribution channel

Technical factors Hotel operation management Managing hotel operations and the standard is
Accessing and monitoring associated with applying technology to reach the
customer satisfaction VHO goals and hotel owners’ revenue targets
Standardization
Transformation
Professionalism

Financial factors Capital expenditure Financial factors are important in measuring

Investor and capital sources revenue and profitability
Profitability
Monthly guarantee
Revenue

Strategic Innovation strategy Strategic management is related to innovation

management Hotel network size and strategy and perceived as the most critical factor for
factors coverage small hotel businesses
Audit quality

Human factors Training VHO management and hotel owner participants

Team commitment agree that the human factor is crucial in improving
Staff recruitment and the standard and service of VHO, primarily due to
selection training
Employee rewards and
benefits

Technology factors Property management system VHOs rely on technology-based solutions and
Table 2. Central reservation system features. They use efficient, accurate, consistent
CSFs for VHO accuracy and efficiency property management and centralized booking and
partnerships reservation systems
with SMSHs Source(s): Authors’ own work

Hence, VHO partnerships with hotel owners are based on three aspects. The first aspect is the
visibility of contract agreements. The second aspect is that VHOs provide a support center for
day-to-day operation problems and related issues for hotel owners, customers and vendors.
The third aspect is VHOs managing owners’ expectations for long-lasting benefits of the
partnerships (i.e. manifesting as increased revenues, occupancy rate and average room rates).
One of the VHO heads of business developments agreed with this view:
We are not selling goods but building partnerships; therefore, we keep interpersonal relationships
with hotel owners. We meet distinctive characteristics. We speak of culture, meaning everyone has a
different outlook on how the business works. (M11)
As technology-based hotel operators, VHOs rely on partnerships with hotel owners. CSFs of VHO in
Therefore, VHOs offer three contract agreements. The first agreement is full revenue-sharing SMS hotels
(i.e. VHOs share revenues at an agreed percentage). Contract agreements between VHOs and
hotel owners include guidelines on managing hotel operations, reaching the standards
outlined by VHOs and hotel owners’ revenue targets. The second agreement is the use of a
minimum monthly guarantee. The third agreement is a self-operating business model akin to
lease-type management. Agreements with VHOs are designed to reduce the risk factors and
hotel owners’ value of investments. For example, one interviewee highlighted the mutually
beneficial agreements and commitments:
We invest funds or transformational capital expenditure to the property partner if they do not have
enough capital to meet our facilities’ standards. Hence, we help them through investment without
return within the contract period. (M11)
One of the advantages of partnering with VHO is that they provide a fixed monthly deposit
according to the initial agreement, which helps us. Suppose we are looking at the capacity of our hotel
right now below 50%, with the security deposit. In that case, we can cover operational costs. (O1)
Interviewees also mentioned that the expansion process should be consistent to increase
revenue and profits for companies and their partners. Ultimately, the objective of
partnerships with hotel owners is to maintain sustainability and commitment together:
We want our property partners to achieve their targeted revenue and business sustainability. This
means financial, products, and services consistency and a long-lasting partnership. (M6)
Evidently, one emerging factor is the adaptation to local culture. VHO management and hotel
owners were concerned with the varying conditions of SMSH operations. Most participants
asserted that the educational background of employees and owners and technological
adaptation in hotels are still low. Therefore, VHO should adapt to the condition, as mentioned
by one of the hotel owners:
Because VHOs typically have standard operating procedures that are globally acceptable, this start-
up company should adapt to the condition of our people and our culture. (O1)
The business development division’s main objectives are acquiring hotel properties and
maintaining relationships with hotel owners.
Business development is the one that initially acquired the property. For example, suppose the hotel
property owners want to join. In that case, business development will explain the terms and
conditions, and they will acquire the property through an agreement that has been agreed to by the
hotel property owner. (M5)
As a hotel management company, VHOs should adapt and adjust their approach to
maintaining communication and agreement with hotel property owners. Therefore, they
should keep a mutually beneficial agreement, focus on commitment and continuously
improve as part of excellent business in the hospitality field. These results coincide with
previous studies on understanding customer orientation relationships (Padilla-Melendez and
Garrido-Moreno, 2014).

4.2 Marketing factors

While segmenting the market, VHO management conducts a comprehensive market survey
assessment process. From the interview results, VHO management and hotel owners
frequently mentioned such factors as marketing strategies, market segmentation, pricing
strategy, branding, promotion and distribution channel. Findings reveal that the weak
position of small hotels in the market could be circumvented through VHO marketing and
promotion strategies.
JHTI The VHO creates the marketing and promotion strategy for us. Previously, we had limited marketing
channels; we only sold our rooms on several property listing platforms. After the partnership
agreement, the VHO improved our online and offline presence. (O7)
We informed the owners of essential data about market intelligence, market surveys, and pricing
strategies. We can decide the price level following market needs. (M7)
Consistent with the extant research, the importance of strategic marketing planning in JV
hotels relates to joint advertising, pricing, promotion and market research activities (Li et al.,
2006). Another found that VHO management and hotel owners also conveyed the importance
of branding for sales and pricing strategy. Property owners will automatically join their
branding when they agree to partner with VHOs. From the perspective of management,
brand image is currently an essential aspect of VHOs’ success; interviewees further
explain this:
Better branding can be achieved by selling more exposure. For example, outdoor neon boxes with the
VHO logo and property name are helpful for branding. (M12)
The findings coincide with the argument of Hua et al. (2009) on how brand equity increases
customer intention to purchase hotel products. Hotels reach a considerably broad audience
through responsive platforms, increase distribution and build branding and operational
efficiency. An effective way is maximizing online media marketing channels, in which mobile
applications become a key strategy to bring customers close to the hotel chain. The VHO
mobile application enables customers to book rooms with three taps on their smartphones
easily. Strategic partnerships with online travel agents (OTAs) also enable hotel owners to
reach a broad consumer market (Yin et al., 2019).
The difference is in terms of operation. For example, in conventional hotels, the booking process until
the check-in process requires an exhausting process. However, at VHO, the booking process is much
simpler—using a mobile application makes everything much easier and more comfortable. (M8)
Previous studies have discussed that the importance of online and digital distribution
channels for budget hotels is the ability to market their properties via multi-channel
strategies (Law et al., 2015; Lei et al., 2019). Leveraging dynamic marketing capabilities
through online distribution plays a critical role in developing SMSHs’ competitive advantage
(Beritelli and Schegg, 2016; Elsharnouby and Elbanna, 2021).

4.3 Technical factors

VHO management and hotel owners discuss technical aspects, such as hotel operation
management, access and monitoring customer satisfaction, standardization, property
transformation and staff professionalism. Before joining VHOs, hotel partners must
undergo a transformation process that ensures that hotel services, the system, management
and staff will meet the VHO standard:
We must transform owner property: it is very crucial to transforming. Everyone engages in the
process and convinces owners to share the same perspective. (M7)
From interviews with hotel property owners, hotel operation management factors and
assessing and monitoring customer satisfaction are crucial regarding technical CSFs.
Participants are concerned with the continuity of the day-to-day hotel operations, which they
describe as a follow:
The VHO helps owners manage hotels regarding administration, services, and product
standardization. We will implement an operational standard for all accommodations that do not
have a star category. For this, we need people with diverse backgrounds who are specialists in areas
 such as the front office, housekeeping, food, and beverages, including the banquet. We also need CSFs of VHO in
people who are strong in accounting. (M7)
SMS hotels
Operational managers in each active region will manage and monitor hotel properties. From personal
experience, the owner feels comfortable with the operational manager. They can ask about hotel
operations. We also often discuss and share knowledge about hotel management, it will help in the
future relationship with owners, and there is an exchange of ideas. (M15)
As a digital hospitality company and hotel aggregator, we offer economical and more affordable
accommodation and are concerned about the quality of our services. Therefore, we should offer a
balance between the two aspects (affordable and quality services). (M12)
The physical product and service quality of SMSH operation are crucial (Hua et al., 2009;
Zhang et al., 2013). Customer orientation is also crucial for the hotel business (Padilla-
Melendez and Garrido-Moreno, 2014) to enhance service quality, deliver superior customer
service and total quality management (Wang et al., 2012; Ahmad and Arif, 2016).
The hotel industry is a service sector that highly depends on human aspects. Following
Brotherton and Shaw (1996) in the three-dimensional hotel operations model, technical
aspects determine the efficiency and economy scale for the successful delivery of hospitality
goods and operations. Standardization and quality of the services system should be adopted
to predict and control output activities (Ivanova and Rahimi, 2016): the higher the hotel
network’s intangible assets (including their standards, facilities and services), the better they
can command presence in the customer psyche (Andreu et al., 2017). Thereafter, VHOs
conduct an evaluation process on how hotels obtain a satisfactory level of guest assessment:
We measure the customer satisfaction index (CSI) and develop a net promoter score (NPS) to measure
guest satisfaction. (M7)
CSI is developed from customers’ ratings of their likelihood to recommend VHO products and
services to others on a scale of 0 (lowest) to 10 (highest). Hotel owners also explained that
these factors are significant for their businesses. VHO management ensures that guests are
satisfied and evaluate actions to maintain the quality standard. Moreover, customer
satisfaction leads to a positive financial performance, in which financial figures are essential
for further adjustment and corrective action (Zhang et al., 2013; Augustyn et al., 2021).

4.4 Financial factors

Owners expressed the current difficulty in obtaining bank loans for their needs. With the
cooperation of VHOs, hotel owners now have finances in the form of capital expenditure
along with a monthly income guarantee. Capital expenditure becomes an attractive factor for
hotel owners. VHOs invest in their partners by supplying capital investment assistance and a
monthly income guarantee. For property owners, capital expenditure has become a
significant factor in the development process:
What is significant is the contract agreement because it provides business capital and other
investment facilities. (M5)
Financial support is crucial for hotel JV collaborations (Li et al., 2006; Ge et al., 2018). The
financial performance factor in hotels can be measured by the rate of return on investment,
income, costs incurred for operations and company profitability (Avcikurt et al., 2011;
Padilla-Melendez and Garrido-Moreno, 2014).

4.5 Strategic management factors

Strategic management is related to innovation strategy and is perceived as the most
critical factor for hospitality businesses (Stylos et al., 2021; Dieguez et al., 2022).
JHTI Strategic management involves executive management determining strategy and objectives
to achieve goals (Geller, 1985). Strategy and objectives will give better and more precise
guidance to solve problems and measure operational success following organizational goals.
Thus, this situation demonstrates the importance of establishing shared values and
launching goals and systems to increase customer satisfaction (Arasli, 2012). One interviewee
mentioned the increasing number of users in the VHO application as an opportunity to
receive more value from customers and increase the chance of getting more investment. The
VHO management also highlights this:
From the next one to two years, we are constantly innovating. We must continue to demand
innovative ideas every day, ones that are out of the box and all kinds; it has become part of our
corporate culture. (M16)
Innovative technology should be based on market research to respond to market needs and
demands, as mentioned by the management of a VHO:
We do marketing based on research to the standards that we set. The products we offer should meet
the category of value for money. (M6)
The next factor is related to the size and coverage of the hotel network. Geographical
coverage is vital for hotels; such coverage helps in the success of hotel operations and
development (Brotherton, 2004a; Hua et al., 2009). A larger hotel scale size and coverage of
hotel networks are also critical. For VHOs, the number of existing properties and personnel in
one country helps in the effective selling and monitoring process:
Of course, we have one competitive advantage in the network. We have the most expansive network.
The advantage lies in our capacity to sell properties in every city, even in other countries abroad,
regarding networking, standardization, and the number of personnel. We have all the support
needed in every region or hub for our operations. (M11)
Another factor is related to how VHOs enhance the quality of services. It is a crucial strategy
employed by hotel owners or managers in SMSHs to face business challenges (Ahmad and
Arif, 2016). Implementing quality audits through VHO management by placing its personnel
to monitor the operations of property hotel partners has increased customer confidence in
using accommodation provided by VHOs. A quality audit guarantees that the products and
services they provide meet a minimum standard despite having differentiated properties
managed by VHOs. The strategy to ensure quality assurance in hotel operational
management can be carried out through standard operating procedures, regulations and,
most importantly, the human factor and the organization (Fredrick, 2019; Elsharnouby and
Elbanna, 2021).

4.6 Human factors

Training is part of CSFs for VHOs, as mentioned by most participants. It aims to provide
standard operational management and increase customer satisfaction with VHOs’ products
and services. The lack of skilled employees in customer service becomes a challenging issue
for SMSHs. Thus, standard hotel operation management for all VHO properties can be
improved by conducting training and coaching. Two interviewees mentioned:
First is an improvement; we then also built educational training for hospitality. (M3)
The VHO thinks about the employee’s development, and the hotel owners as well. (M11)
Owners agree that VHOs could develop hotel operation human resources. VHOs change
product knowledge and the ability to upgrade the technology used by the hotel staff to help
operations. Owners feel improvement in knowledge transfer during the in-house training
process. Most owners agree that VHOs continually innovate and develop technologies related CSFs of VHO in
to PMSs, hardware and mobile application. Therefore, training is for employees and owners. SMS hotels
One owner stated:
Our company is successful because we think about our employees’ development. However, the
training is not only for employees but also for the owners. We meet with the owners and mentor them
on managing the hotel. (M7)
The finding supports Ahmad and Arif (2016), which posited that training increases business
success in the SMSH sector. Training for employees improves customer service (Hua et al.,
2009). From the characteristics of company owners, top-level management is needed to
overcome the challenges in such a dynamic business climate. The need for an innovative and
sound strategy should be supported by quality leadership team commitment. Increasing
team commitment is vital to achieving organizational goals. Organizations’ process
management is essential to teamwork and strategic plans (Yadegaridehkordi et al., 2018).
VHOs also consider employee welfare aspects owing to work–life balance. Accordingly,
employee rewards emerged as one of CSFs for VHOs. As previously mentioned by one VHO
management participant:
Company performance and targets are balanced with our reasonable compensation and
rewards. (M14)

4.7 Technology factors

VHOs are hospitality management companies that utilize technological developments to
maximize and empower local accommodation offerings. Only two CSFs in technology factors
were found herein: PMS and accuracy and efficiency of the central reservation system.
We are a start-up company that relies on technology. Our system keeps improving by getting
insights from our hotel operation team, although we already have a software engineering team. The
improvement comes in more user-friendly PMS for the employee and owners. This technology was
beneficial since hotels did not need large folio books and dealt with a large margin of errors and time-
consuming paperwork. With this PMS, business processes for the hotel property have run more
efficiently. (M7)
The use of data science and analytics to enhance the guest experience has become crucial to
operations. Systems are transparently accessed in real-time to improve efficiency in time and
funding. Moreover, using technology creates a more comfortable booking experience for
guests, in which consumers go online and make travel-related purchases using online
platforms.
What makes VHO different is promotions on the website and online travel agents, which will impact
small hotel property partners. When they join us, we will help their property become more profitable
by improving their online platform appearance. (M15)
Websites and mobile applications will reach a broader audience, increase distribution and
improve branding and operational efficiency. Mobile applications enable customers to book
rooms with just three taps of their smartphones. The concept is simple because it provides
three steps for booking: visit the website/mobile application, choose a location and find the
hotel that fits the tourists’ requirements. This outcome supports theories that note the
importance of a central reservation system in SMSHs and the budget hotel sector (Brotherton,
2004a; Hua et al., 2009; Avcikurt et al., 2011).
SMSHs partners will also get hotel management system applications that are beneficial to the owner
in the process of checking and performance of their properties every day through a device they
have. (M11)
JHTI 4.8 CSFs for VHOs
Seven themes were conveyed by the management and hotel owners, with five themes being
consistent with the extant studies: strategic management, human, technical, marketing and
technology factors. Meanwhile, the interviews discovered two new themes: financial and
partnership factors.
In the current study, the partnership factors received the highest weight among other
CSFs. VHOs, as light asset companies, must maintain their property partners to sustain and
expand the business. The relationship between VHOs and clients, such as commitment,
delivering information, communication and troubleshooting, is part of VHOs’ goals to
maintain partnerships with hotel owners. These findings extend the literature on customer
orientation relationships (Padilla-Melendez and Garrido-Moreno, 2014). However, the
partnership between VHOs and non-classified hotels continues to face challenges.
Unclassified hotels have no experience using technology and managing standardized hotel
management systems. The transformation process to become a markedly reliable
accommodation prioritizing quality and providing a pleasant stay experience supports the
findings of Arasli (2012).
Hotel businesses need marketing strategies to maximize revenue and increase
occupancy rates. Marketing factors are the second most mentioned herein. Management
and owners have the same perspective, mentioning five factors: marketing and promotion
strategies, market segmentation, pricing strategy, branding and distribution channel. The
importance of strategic marketing planning in JV hotels is connected to joint advertising
activities, pricing strategy, promotion activities and market research activities, as
previously mentioned by Li et al. (2006). Marketing and sales are part of functional CSFs, in
which several categories are assessed: effectiveness of advertising, market intelligence,
customer database and competitor intelligence (Brotherton et al., 2003; Brotherton, 2004b).
The emergence of VHOs on various social media platforms is also beneficial— the use of
the internet as a marketing medium, as explained in the literature, impacts the promotion
of the business. The use of websites as promotional media and customers being part of the
promotional activities by VHOs are supported by Ahmad and Arif (2016) and
Arasli (2012).
The third aspect is technical, such as hotel operation management, standardization,
transformation and personnel professionalism. Participants are concerned with the
continuity of day-to-day hotel operations. Brotherton and Shaw (1996) outlined a
centralized reservation system that is efficient, accurate and consistent in the quality of
the products and facilities offered; this result is relevant to the current study’s findings on
using PMS and standardizing hotel operations by VHOs, including the importance of
accessing and monitoring customer satisfaction. Customer satisfaction leads to a positive
financial performance, in which financial figures reflect the needed further adjustment and
corrective action (Zhang et al., 2013). Thus, customer-related measures and customer
orientation in CRM implementation are key factors for hotel success (Padilla-Melendez and
Garrido-Moreno, 2014).
The fourth aspect is the financial aspect. Financial support is crucial for hotels’ JV
collaborations (Li et al., 2006). VHOs invest in their partner/s by supplying capital investment
assistance, including capital expenditure and sources. One stated:
It is difficult to get bank loans for hotel business needs. With the cooperation of VHOs, hotel owners
now have finance in the form of capital expenditure and a monthly income guarantee. (O3)
The increase in revenue and profitability should be measured, which is one of VHOs’ goals.
From the literature on hotel CSFs, the financial performance factor is the revenue, rate of
return on investment, income, costs incurred for operational activities and the company’s
profitability (Avcikurt et al., 2011; Padilla-Melendez and Garrido-Moreno, 2014).
 The fifth aspect is strategic management. This study revealed that innovation strategy is CSFs of VHO in
perceived as the most important factor for small hotel businesses. In the digital era, SMS hotels
conventional SMSHs should transform their businesses to adapt to the technology and
continuously innovate. Another critical factor is the size and coverage of the hotel network: a
larger hotel scale size and coverage of the hotel network are also critical. Geographical
coverage is important for hotels because it helps in the success of hotel operations and
development (Brotherton, 2004a; Hua et al., 2009). The next most important factor is the
implementation of quality audit by VHO management by placing its personnel to monitor the
operations of property hotel partners. The practice increases customer confidence in using
accommodations provided by VHOs, guaranteeing that the products and services they
provide meet a minimum standard despite having differentiated properties managed by
VHOs. Several initiatives include training, team commitment, staff recruitment and employee
incentives.
In the sixth aspect, VHO management and hotel owner participants agreed that the human
factor is also crucial in improving the standards and services of VHOs. Therefore, the human
aspect is crucial for all operational aspects of the hotel business (Brotherton and Shaw, 1996).
Organizational productivity related to staff recruitment by finding the right people in an
organizational structure’s proper position, coupled with team commitment, is pivotal for
business success. Otherwise, lacking skilled employees to handle customers becomes a
challenging firm issue (Ahmad and Arif, 2016).
The last aspect of technology was found herein, namely, PMS, which presents information
transparently and is used to improve efficiency in both time and funding. The second is the
accuracy and efficiency of the central reservation system. Findings support previous studies
on using a PMS (Sharma et al., 2017; Wiastuti and Susilowardhani, 2017).

5. Conclusions
This study revealed seven themes of CSFs for VHOs and SMSHs, as conveyed by the
management and hotel owner participants during the interviews: five themes were based on
the literature review (i.e. strategic management, human, technical, marketing and technology
factors), while two new themes were discovered from the interviews (i.e. financial and
partnership factors). From the VHO management perspective, the most critical factor for
VHOs is the technical aspect, including standardization, transformation, quality assurance
and professionalism. From the owners’ perspective, financial aspects were the most critical
factors for VHOs, particularly on the monthly guarantee. The owners also explained that the
technology aspect has helped them manage their hotel property through the PMS and central
reservation systems. Clients’ relationship was also found to be crucial from the perspectives
of both VHO management and hotel owners.
Hotel owners and VHO management has enabled the confirmation and refinement of the new
CSFs framework for VHOs, serving as a foundation for the concepts and characteristics of VHOs.
This study’s results show that the partnership factor accounts for the majority of CSFs for VHOs.
Partner selection is also a primary factor for success in establishing a JV. When creating an
International Joint Ventures (IJV), trust, commitment and congruent goals are highlighted as
important factors in the relationship with a partner. They are essential for the relationship’s
success (E Silva and Oliveira, 2017). Maintaining good client relationships is likewise invaluable
in increasing brand value and achieving goals of increased property portfolios: which are needed
to become a market leader (Casta~ neda Garcıa et al., 2018; Wang et al., 2019).
In cooperation and networking, Li et al. (2006) examined the primary motivation for
selecting JV partners from local and expatriate managers’ perspectives. Factors relevant for
JV hotels include strategic planning, willingness to share information and knowledge with
local partners, support for strong financial performance and experience in marketing,
JHTI planning and conducting market research. Moreover, innovations and financial factors were
pivotal, especially from the perspective of hotel owners. Note that another highlight was the
creation of marketing and promotional strategies through multiple media channels, such as
by using online, offline and micro marketing media. Strategies should be inexpensive and
effective platforms for marketing and advertising, thereby increasing hotels’ competitiveness
level in the marketplace (Paprocki, 2017; Stylos et al., 2021).

5.1 Theoretical implications

The theoretical implications of this study are threefold. First, this study expands the
literature on the use of technology in hospitality management, particularly on the application
of technology for SMSHs in collaboration with emerging highly technologically dependent
hotel management companies, such as VHOs. Second, the current research contributes to the
body of literature on hospitality management by providing an overview of the role of hotel
operators in cooperating with SMSH owners. The perspectives discuss hotel management
agreements (HMAs), partnerships between owners and hotel operators and affiliations with
the hotel industry through a 4.0 smart technology implementation. Third, this study finally
provides perspectives from hotel owners on the contract agreements, the financial benefits
obtained from the cooperation process and hotel management operations utilizing innovative
technology. Smart innovation for hotels uses cutting-edge technologies to improve efficiency,
reduce costs and enhance customer experience, including VHOs, automated check-in/check-
out systems, digital keyless entry systems, artificial intelligence (AI) and chatbots.
By leveraging these technologies, hotels can provide a better overall experience for their
guests and increase operational efficiency.

5.2 Practical implications

For hotel owners, a virtual hotel business can be used as a solution for service quality and
marketing and promotion strategy in the current digital era. Moreover, hotel operators can
determine CSFs from the owners’ interests (i.e. providing expertise in the marketing process
and promotion strategy and implementing standards and training for hotel operations by
prioritizing aspects of digital technology). Hotel management should allocate budget for
information systems and update their technology on their daily operations while maintaining
the data management process. Findings will help VHO management determine the most
significant CSFs to achieve their goals, measure performance and expand their business
networks. In addition, this study will help inform the government to create policies on how
SMSHs can be transformed into standardized accommodations. Accordingly, it will support
local tourism, particularly in developing countries, such as Indonesia, India, the Philippines
and Vietnam. Most accommodations are in the SMSH categories.

5.3 Limitations and future research

For the number of participants, this study’s sample size (nine properties) is still small
compared with the total number of VHOs available globally. Another limitation is that the
sample interview participants were only from VHO properties in Indonesia. With the
limitation on domestic travel during the COVID-19 pandemic, the researcher cannot directly
observe the conditions of hotels included in this study. Thus, future studies can be conducted
and compared from such countries as China, India, Singapore, Thailand, the Philippines, the
USA and Vietnam, where VHOs primarily operate. Future studies may also include
participants who are hotel owners but have not joined or have ended their contract
agreements with VHOs. Future scholarly attention could compare their perspective on VHOs
and hotel management agreements.
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About the authors

Fajar Kusnadi Kusumah Putra, is Assistant professor in Department of Hospitality Management, NHI
Bandung Tourism Polytechnic, Indonesia. He has a Doctoral degree in Hotel and Tourism Management
at the School of Hotel and Tourism Management, The Hong Kong Polytechnic University. His research
interests include eTourism and hospitality management. Fajar Kusnadi Kusumah Putra is the
corresponding author and can be contacted at: [email protected]
Rob Law, PhD, is UMDF Chair Professor of Smart Tourism, in Asia–Pacific Academy of Economics
and Management, Department of Integrated Resort and Tourism Management, Faculty of Business
Administration, University of Macau. His primary research interests are technology application and
information management.

For instructions on how to order reprints of this article, please visit our website:
www.emeraldgrouppublishing.com/licensing/reprints.htm
Or contact us for further details: [email protected]
 Journal of Hospitality and Tourism Insights
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Critical Success Factors for Virtual Hotel Operator
Partnership with Small- and Medium-sized Hotels:
Perspectives of Owners and Operators
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Journal: Journal of Hospitality and Tourism Insights

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Manuscript ID JHTI-06-2022-0244.R5

Manuscript Type: Research Paper

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Critical success factors, Hotel management partnership, Small-and
Keywords:
medium-sizes hotels, Smart technology innovation, Virtual hotel operator
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lity
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Page 1 of 22 Journal of Hospitality and Tourism Insights

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Critical Success Factors for Virtual Hotel Operator Partnership with
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5 Small- and Medium-sized Hotels: Perspectives of Owners and Operators
6
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8 ABSTRACT
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Purpose – This paper identifies the critical success factors (CSFs) of virtual hotel operator
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11 (VHO) in using hotel management system partnerships with small- and medium-sized hotels
12 (SMSHs).
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13 Design/methodology/approach – This study uses a qualitative approach, with 25 semi-
14 structured interviews with hotel owners and VHO management. Thematic analysis is used to
15 determine themes to evaluate hotel owners and operators’ perceptions.
16
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Findings – CSFs for VHO partnership with SMSHs include marketing and promotion
17
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strategies, client relationships, training and human resources development, hotel operation
19 management, innovation strategies, capital expenditures, and property management systems.
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20 VHOs also have a symbolic impact on their mutualistic relationship with SMSHs by increasing
21 service and enhancing product competitiveness and profitability.
22 Research limitations/implications –Findings are beneficial for VHO in determining the most
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23 significant CSFs, thereby establishing additional metrics in business performance and

24
increasing resilience in the accommodation sector. Further studies can measure the digital
25
26 technology factors from VHO, including property management systems and mobile
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27 applications.
28 Originality/value – This study first identifies CSFs for VHO companies from the perspectives
29 of hotel owners and management. This contribution adds to the literature on CSFs in the context
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30 of digital technology implementation in SMSHs. Moreover, implications are beneficial for

31 VHO management in determining the most significant CSFs for companies to measure their
32
business performance and increase resilience in the accommodation sector.
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35 Keywords: Critical success factors; Hotel management partnership; Small-and medium-sizes
36 hotels; Smart technology innovation; Virtual hotel operator
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37 Paper Type: Research paper

38
39
40 1 Introduction
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Technological growth in the travel and tourism sector has affected how the hotel business
43 effectively connects customers and markets its products and services. Hotel smart technology
is a term used to describe the use of technology in hotels to improve efficiency, reduce costs,
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44
45 and enhance customer experience (Buhalis et al. 2019). In a markedly competitive business
46 era, small- and medium-sized hotels (SMSHs) should prioritize innovation in managing hotels
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47 by adopting digital technology strategies (Dieguez et al. 2022). SMSHs should allocate a
48
budget for information systems to update their technology with their daily operations and
49
50 maintain the data management process (Buhalis and Leung 2018; Yadegaridehkordi et al.
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51 2018). Hotels not adapting to new market conditions and forming alliances will face
52 operational shortcomings. Single properties also have limited opportunities to benefit from
53 considerably extensive referral programs and international marketing campaigns, unlike those
54 for chain and affiliated hotels (Ivanova and Rahimi 2016; Mohammad 2016). This
igh

55 technological growth (and performance gap) eventually led to the emergence of a new
56
technology-based hospitality management business called virtual hotel operator (VHO).
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58 VHO are a type of smart hotel management companies that utilizes software that can be
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59 used to manage and operate hotels. Virtual hotel operator use technology to create
60 service/product, marketing, process, and organizational innovations (Wiastuti and
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1
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3 Susilowardhani 2017; Han et al. 2021; Elshaer and Marzouk 2022). These companies provide
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customers with an efficient and cost-effective way to book rooms and manage their stay. They
6 also offer online booking, customer service support, housekeeping services, and mobile-based
ur
7 application for guests and their hotel partners. OYO and Reddoorz are examples of VHO
8 providing their customers with an efficient, cost-effective way to book and manage their rooms.
9 VHO accelerate the region’s online travel ecosystem and provide solutions for hotel owners
na
10 and customers looking for quality and price-standardized accommodation (Anandan et al.
11
2016).
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VHO create more value for hotel owners and help them develop and transform their
lo
13
14 businesses through technology adoption, staff training, standard operation, interior design,
15 marketing strategies, promotional materials, and customer service (Wiastuti and
16 Susilowardhani 2017; Nugroho and Hati 2020; Prakarsa et al. 2020; Arreza 2022). This form
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17 of a co-evolutionary business system is characterized by relationships among technologies,

18 institutions, and actors, including end-users or customers and communities throughout the
19
entire network (Aarikka-Stenroos and Ritala 2017).
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21 However, the partnership between VHOs and SMSHs experiences specific challenges:
22 most SMSHs involved lack any experience in using technology for hotel management systems,
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23 have low budget for innovation, and lack strategic vision, management expertise, and ability
24 to utilize technology for their presence on online distribution channels (Smithson et al. 2011;
25 Mohammad 2016; Yin et al. 2019; Fjellström et al. 2020).
26 However, the most prominent issue is identifying and measuring critical success factors
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27
28
(CSFs) for VHO and SMSH partnership. As VHOs expand in the SMSHs market, VHO
29 management should also be surveyed on how they operate, measures their performance, and
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30 maintain their partnership with hotels. However, empirical research on virtual hotel operators
31 has remained scarce. Previous studies on VHOs have discussed the nature of their businesses
32 (Sharma et al. 2017; Wiastuti and Susilowardhani 2017), customer perceptions of VHOs
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33 (Kurnia and Sulistiani 2019; Nugroho and Hati 2020), and technology application (Prakarsa et
34
al. 2020). Only a few discussions have revealed the success factors that benefit the entire
35
36
network and transform the SMSHs business (Arreza 2022). Previous studies have also failed
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37 to consider the critical role of VHO stakeholders (i.e., management and hotel partners).
38 Ultimately, these gaps are what the current study seeks to fill in.
39 The current study identifies critical factors contributing to the success of VHOs in
40 partnership with SMSHs. Morrison and Thomas (1999) explained that SMSHs have a small
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41 business scope: they are self-managed by owners and financed by individuals or small groups.
42
Most properties are owned and managed by those without previous hotel management
43
backgrounds. Therefore, they struggle to maintain quality service standards and face many
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45 challenges, such as competition level, operational costs, technical and management skills,
46 appropriate e-business solutions, and ownership of ICT equipment (Pine et al. 2000; Buhalis
and Kaldis 2008).
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48 This study will contribute to the literature on technology use in hospitality management,
49 particularly in the context of its adoption by SMSHs. These results ultimately enrich the
50
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51
available scholarly perspectives on hotel management agreements, partnerships between
52 owners and operators, brand affiliations, and hotel operators. Hotel owners must understand
53 their perspectives toward partnership with VHOs, collaboration between VHOs and SMSHs
54 ushers future competition and consolidation. Subsequent sections will discuss the theoretical
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55 background of VHOs, CSFs, and methodology, results, and discussion. The final section
56 provides the conclusion, theoretical and managerial implications, and recommendations for
57
future research.
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3 2 Literature review
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2.1 VHOs
6 Since its first appearance in 2013, VHOs have constantly evolved as a new player in the hotel
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7 industry as an asset-light type of business. VHOs focus on developing business-to-business
8 (B2B) partnerships with SMSHs, with companies continuing to expand and attract new
9 investors (Wiastuti and Susilowardhani 2017; The Economic Times 2018; Russel 2019). Hotel
na
10 owners partnering with VHOs adopt a management and franchise model. The two categories
11
of this model are leases and franchises. Leases involve property owners buying brand
12
franchises, managed directly by VHOs with royalty fees. Franchises involve owners
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13
14 cooperating with the rental scheme or revenue-sharing for rooms booked via VHO platforms.
15 VHO management system includes various hotel management developments, such as
16 technology adoption, staff training, standard operation, interior design, room decoration,
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17 standardized furniture, marketing strategies, promotional materials, and customer service

18 through their customer and hotel owners’ mobile applications.
19
Most VHOs provide hotel standards and guidelines that help management teams transform
os

20
21 a property while calculating estimated costs and monitoring renovation processes (Oravel Stays
22 2018). Sharma et al. (2017) explained that eight stages are involved in the VHO hotel property
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23 listing process. First, the transformation process begins with business development managers
24 identifying potential properties. Second, detailed audit and negotiation with hotel owners are
25 involved. VHOs will share specific characteristics, such as quality assurance inspection. Third,
26 hotel partners must meet the quality specifications set by the VHO management before a
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28
partnership agreement. Fourth, orientation and integration with VHO standardized facilities
29 (e.g., hot showers, clean linen and towel, air conditioners, Wi-Fi, and in-room amenities) are
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30 conducted. Fifth, VHO business development managers prepare the transformation process,
31 followed by VHOs providing capital expenditure to improve facilities and hotel buildings.
32 Lastly, the final process involves hotel properties going live on VHO websites, mobile
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33 applications, and other distribution channels. After the transformation, operational teams
34
maintain the standard and train hotel employees to use the property management system and
35
36
managing daily hotel operations. Although VHOs offer various advantages in technology along
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37 with the standardization of hotel management, they remain in the development stage.
38 Therefore, their CSFs should be identified.
39
40 2.2 CSFs for hotels
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41 CSFs have become an essential concept concerning hotel goals and objectives in the hotel and
42
accommodation sector. Brotherton and Shaw (1996) described CSFs as activities and processes
43
supporting organizational goals. In turn, they should be actionable, controllable, and
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44
45 measurable. CSFs are also sector-specific—the implication is that focused research in a sector
46 on CSFs should provide specific recommendations for businesses and entrepreneurs
(Engelbrecht et al. 2014).
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48 CSFs have become essential in hotel goals and objectives in the hotel and accommodation
49 sector. With increasingly fierce competition and inevitable use of technology, companies need
50
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51
innovative strategies to achieve their goals (Avcikurt et al. 2011). Brotherton and Shaw (1996)
52 explained that CSFs in hospitality services could be categorized on the bases of technical or
53 human aspects. Technical and human aspects are considered integral to corporate culture,
54 cooperation, management style, company performance, productivity, and business metrics in
igh

55 achieving company goals (Politis et al. 2009; Arasli 2012; Padilla-Meléndez and Garrido-
56 Moreno 2014; Spencer and Van Zyl 2015; Yadegaridehkordi et al. 2018).
57
Diversification standards of the hotel business have also changed rapidly. However, the
58
literature’s insufficiency highlights the paucity of knowledge on CSFs related to VHOs and
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59
60 partnership with SMSHs. CSFs in hotel operations from the customer perspectives have also
3
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3 been explored (Padilla-Meléndez and Garrido-Moreno 2014; Wang and Hung 2015; Fuentes-
Jo
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Medina et al. 2018; Lee et al. 2019), with some studies explicitly outlining the context of
6 SMSHs (Avcikurt et al. 2011; Zhang et al. 2013; Wang and Hung 2015). However, only a few
ur
7 studies have discussed the concept of CSFs for VHOs. Most studies use a quantitative method
8 approach (Avcikurt et al. 2011; Wang and Hung 2015; Ahmad and Arif 2016), which enables
9 obtaining more participants. However, it cannot explore the respondents’ views in a markedly
na
10 in-depth manner.
11
12
2.3 CSFs influencing joint ventures in the hospitality business
lo
13
14 Partner selection is a primary factor in achieving success in establishing joint ventures (JVs).
15 International JVs (IJVs) are among the most common forms of market entry companies use for
16 their internationalization processes. When creating IJVs, trust, commitment, and congruent
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17 goals are highlighted as important factors in relationships. They are essential for their success
18 (e Silva and Oliveira 2017). Similarity in partners’ corporate values and missions has become
19
a significant impetus in developing competitive service strategies. This congruence is
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20
21 supported by building mutual trust, synergetic effects of using resources, strong financial
22 background and equity sharing, and information exchange and knowledge sharing with local
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23 partners. Efficiency in strategic and marketing planning, experience in market research

24 activities, and exceeding customers’ expectations and needs are critical to these alliances’
25 success (Li et al. 2006; Magnini 2008; Lee et al. 2013).
26 Cooperation between hotel businesses and affiliation with chain hotel brands create
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27
28
associations in customers through several strategies, such as assessing customer reviews,
29 contacting the target market, offering benefits to members, and offering a corporate
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30 contract/rate for groups or companies (Resende et al. 2018). Negotiating and operating
31 managed hotels are complex processes, in which owners and operators must agree on various
32 issues. All parties involved must understand the agreement and the other partners’ perception
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33 of it (van Ginneken et al. 2019). Contractor and Kundu (1998) identified five critical factors
34
when choosing an international hotel alliance: economies of scale, firms’ ability to exercise
35
36
management control and maintain quality, need for size in global operation, reservation system,
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37 and investments in training.

38 Industry challenges include competitive pricing, better marketing and promotion methods,
39 improved quality of facilities, enhanced service delivery, customer service by maintaining good
40 customer relationships, improving the quality and variety of products offered (i.e., cleanliness,
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41 technology, facilities), and loyalty schemes used to retain customers (Ahmad and Arif 2016).
42
Inter-relationship among hotel management companies and hotel owners should be based on
43
cooperative relationships to overcome these limitations. Hence, business strategies adopted by
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44
45 SMSH owners include but not limited to strengthening the market position of small hotel
46 businesses through various strategies, such as branding, product comparison, service
technology, and themes that contribute to the overall image-building of a small hotel business.
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47
48 Factors associated with image building include hotel design, management philosophy,
49 commitment to quality and consistency in service delivery, and use of smart technology
50
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51
innovation for increased competitiveness and business performance (Fredrick 2019; Lee and
52 Lee 2020; Nunkoo et al. 2020; Dieguez et al. 2022).
53 The current study’s literature review reveals three CSFs for hotels. The first is human and
54 technical aspects, level of service quality, financial performance, and marketing (Brotherton
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55 and Shaw 1996; Avcikurt et al. 2011; Yadegaridehkordi et al. 2018). The second is customer
56 relationship management (CRM), information and technology, knowledge management
57
capability, customer orientation, and organizational readiness (Arasli 2012; Padilla-Meléndez
58
and Garrido-Moreno 2014). The third is the physical environment, including the hotels’ interior
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59
60 and exterior, leading to customer satisfaction (Yadegaridehkordi et al. 2018).
4
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3 Progress and opportunities abound when exploring CSFs in hotels. Yadegaridehkordi et al.
Jo
4
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(2018) proposed four aspects that influence the performance and growth of small hotels. The
6 first is the organizational aspect, including top management support and financial performance.
ur
7 The second is human resources, which include employee preparation, education, service
8 standardization, quality, and customer satisfaction. The third is environmental atmosphere,
9 including hygiene and cleanliness, interior and exterior architecture, and location. Fourth is
na
10 information and technology, encompassing firms’ external and internal technologies and
11
benchmarking with process and equipment standardization.
12
lo
13
14
15 3 Methodology
16 3.1 Research design
fH

17 Exploratory research is needed to understand hotel owners’ perspectives and VHOs'

18 management on their partnerships to identify CSFs for VHOs. The qualitative approach is a
19
“well-established approach to researching phenomena in the social sciences, and its emphasis
os

20
21 is on empathetic understanding, especially regarding the ‘how’ and ‘why’ of tourism-related
22 phenomena and experiences” (Dwyer et al. 2012, P.312). Purposive sampling was used to
pit

23 select relevant participants able to answer specific research purposes (Patton 2014). Given that
24 the study focused on developing VHOs in Indonesia, the sampling focused on key participants
25 from Indonesian VHO management and hotel owners. Participants were recruited via different
26 procedures prior to the fieldwork. First, VHO management was invited based on the company’s
ali

27
28
affiliation accounts on the social network platform LinkedIn; the platform “connects
29 professionals in various fields and, therefore, provides greater ability to target data collection
ty

30 to an appropriate social network” (Dusek et al. 2015, P.282).

31 According to BPS Statistic Indonesia (2018) and Euromonitor International (2018), over
32 28,230 places of accommodation have been registered across Indonesia. However, most of
an

33 these places (88.25%) are not considered SMSHs, and there is still a significant need to
34
standardize SMSH hotel supply in Indonesia. SMSH properties can be classified as one-, two-,
35
36
and three-star hotels, along with non-star accommodations, such as guest houses and
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37 homestays. Chosen properties had no more than 100 rooms, had 10–49 employees engaged in
38 operations, and controlled and funded by an individual or a small group (Middleton 1998;
39 Morrison and Thomas 1999; Ahmad and Arif 2016).
40 Semi-structured interviews with open-ended questions were employed to meet the research
ou

41 objectives. Altinay et al., (2015) explained that these interviews enable participants to explain
42
their point of view, seek new perspectives, find general trends, and understand the relationships
43
of variables in research. Personal invitations based on the SMSH category identified herein
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44
45 were used to recruit hotel owners’ participants. SMSHs are classified as non-star and
46 independently operated hotels, unaffiliated with local or international hotel chains. A total of
156 research invitations were sent to potential VHO management level. Their profiles were
m

47
48 categorized into three groups: CEO/founder/co-founder (6 profiles), executive management
49 positions (74 profiles), and middle range management positions (76 profiles). These people
50
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51
had been hired and worked for VHOs. They had been with VHO companies from six months
52 to seven years. Participants came from various first-tier cities in Indonesia (where most VHO
53 properties are located). A total of 16 (3.84%) VHO management representative were willing to
54 be interviewed. Kwortnik (2003) explained that the minimum number of research samples
igh

55 suitable for qualitative research projects is 12. Therefore, this study has reached the criteria
56 mentioned.
57
58
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59
60
5
 Journal of Hospitality and Tourism Insights Page 6 of 22

1
2
3 Table 1.
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4
5
Profile of participants
6 VHO Management
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7 IDs Positions Years of experience
8 M1 Assistant general manager 12 years
9
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10 M2 E-commerce executives 4 years
11 M3 Hotel operation manager 7 years
12 M4 Regional head 14 years
M5 Human resources business partner 11 years
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13
14 M6 Senior hotel operations manager 18 years
15 M7 Country manager for hotel operations 15 years
16 M8 Hotel consultant 13 years
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17 M9 Business development manager 10 years

18 M10 Operations manager 4 years
19 M11 Head of business development 9 years
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20 M12 Head of business development 11 years

21 M13 Head of operation excellence 6 years
22 M14 Senior business development manager 8 years
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23
M15 Assistant general manager 13 years
24
M16 Regional corporate sales manager 10 Years
25
26
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27 Hotel Owners
28
Years of
29 Types of
IDs Occupations partnership with
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30 accommodation
31 VHO
32 O1 Banker Guest house One year
O2 Information technology (IT) Homestay Five years
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33
34 O3 Hotel manager One-star hotel Four years
35 O4 Social entrepreneur Two-star hotel Four years
36 Three-star hotel One year
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37 O5 Human resource manager Three-star hotel One year

38 O6 Contractor Two-star hotel Three years
39 O7 Wedding organizer Guest House Two years
40 O8 Retail Two-star hotel Two years
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41 O9 Catering business One-star hotel Three years

42
43
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44
45 The interviews focused on the participants’ experiences, VHO goals and characteristics,
46 and critical factors for VHO success from management and hotel owners. They were conducted
from June to August 2020. Owing to the COVID-19 pandemic, most were held using online
m

47
48 meeting platforms (e.g., Zoom meetings, Google meet). All the participants’ identities in this
49 study remain anonymous. A total of 16 participants represented four VHO companies that
50 operated in Indonesia: Airy Rooms, OYO rooms, Reddoorz, and Zen Rooms. These VHO
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51
52
companies represent one of Asia’s most rapidly expanding types of hospitality management,
53 in which an enormous number of SMSHs operate. Its core idea is to transform SMSHs and
54 ensure customers’ safety and comfort by unifying them under their brand name. Meanwhile,
igh

55 nine represented hotel owners (Table 1). Respondents’ job descriptions in VHOs are connected
56 to hotel operations, business development, transformation, marketing, and human resources.
57 VHO participants’ experiences ranged from 4 to 18 years of working experience in various
58
fields (e.g., hotels, resorts, cruise ships or restaurants). Specialties varied from hospitality
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59
60
backgrounds, such as hotel operations, e-commerce, customer services, revenue management,
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Page 7 of 22 Journal of Hospitality and Tourism Insights

1
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3 sales and marketing, event management, pre-opening, and procurement. By contrast, six other
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4
5
managers came from non-hospitality backgrounds, such as banking, insurance, consumer
6 goods, retail/sales, and human resources.
ur
7 Nine hotel owners were interviewed. Hotel owners’ educational backgrounds were unrelated
8 to hospitality, including management, economics, IT, and psychology. Most hotel owners were
9 inexperienced in the hospitality industry: their experiences and specialties were remarkably
na
10 diverse. For example, some were wedding organizers, caterers, social entrepreneurs,
11
salespersons, and contractors. Only one participant had experience in managing his/her
12
family’s hotel business. Accommodation types ranged from the homestay, guest houses, and
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13
14 one- to three-star hotels. The partnership agreement between hotel owners and VHOs lasted
15 one to five years. The diversity of the participants in this study ultimately helped the
16 comprehensiveness and diversity of information from the participants’ perspectives.
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17
18 3.2 Data analysis
19
From the results of the interview researchers invited the respondents to verify the findings to
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20
21 improve credibility. The interviewer asked for the participant’s prior and informed consent to
22 be recorded for data collection. Recorded data were translated and copied (transcription). Each
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23 participant was given a copy of the interview transcript to review data accuracy. Interviewees
24 agreed and signed the interview protocol and consent form. Thereafter, all participants signed
25 and returned the member-checking consent form to the researcher.
26 Recorded interviews were immediately transcribed, lasting an average of 49 minutes per
ali

27
28
participant. ATLAS.ti (version 8), a qualitative data analysis software, was used to analyze the
29 coding. Thematic analysis searched for commonalities and themes describing the data (Clarke
ty

30 and Braun 2017). A theme can be interpreted as an affirmation that creates meaning or a
31 statement of meaning. Meanings were also obtained from interviews and were formulated by
32 the researcher.
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33 The current study considered three aspects for reliability (Creswell and Creswell (2017).
34
The first aspect is triangulation data from multiple sources of participants in the interviews.
35
36
This study conducted interviews with two groups of participants: hotel owners and VHO
dT

37 management. Secondary data reports, online travel trends, hotel statistics, and articles on VHOs
38 were used to complete the current research analysis. Hence, this study’s validity and reliability
39 were based on data sources.
40 The second aspect is member checking. Throughout the analysis process, participants
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41 would check their responses through ongoing dialogue on interpretations based on the
42
informant’s checking to ensure the actual meanings of their responses. Member checking
43
ensures accurate interpretations (Savin-Baden and Major 2010), involving the participant or
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44
45 information provider being reconfronted with the interview data. Thereafter, the interviewer
46 would check with the participants to confirm their responses by sending verbatim transcripts.
Member-checking consent forms were sent to the participants via email and WhatsApp for
m

47
48 faster response.
49 The third aspect is validity. Each participant was given a copy of the interview transcript
50
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51
to review data accuracy. Thereafter, the researchers invited the respondents to verify these
52 findings to improve credibility. The participants were asked to read and correct the summary
53 of the researcher’s interview results, with participants signing the member checking consent
54 form if they saw the data as valid.
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55
56
57
4 Results and discussion
58
4.1 Partnership factors
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59
60 Client relationship is the most critical factor in the success of VHOs. VHOs, as light assets
7
 Journal of Hospitality and Tourism Insights Page 8 of 22

1
2
3 companies, maintain their property partners to sustain and expand businesses. Hence, VHO
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4
5
partnerships with hotel owners are based on three aspects. The first aspect is the visibility of
6 contract agreements. The second aspect is that VHOs provide a support center for day-to-day
ur
7 operation problems and related issues for hotel owners, customers, and vendors. The third
8 aspect is VHOs managing owners’ expectations for long-lasting benefits of the partnerships
9 (i.e., manifesting as increased revenues, occupancy rate, and average room rates). One of the
na
10 VHO heads of business developments agreed with this view:
11
12 “We are not selling goods but building partnerships; therefore, we keep interpersonal relationships
lo
13 with hotel owners. We meet distinctive characteristics. We speak of culture, meaning everyone has
14 a different outlook on how the business works.” (M11)
15
16 As technology-based hotel operators, VHOs rely on partnerships with hotel owners.
fH

17 Therefore, VHOs offer three contract agreements. The first agreement is full revenue sharing
18 (i.e., VHOs share revenues at an agreed percentage). Contract agreements between VHOs and
19 hotel owners include guidelines on managing hotel operations, reaching the standards outlined
os

20 by VHOs, and hotel owners’ revenue targets. The second agreement is the use of a minimum
21 monthly guarantee. The third agreement is a self-operating business model akin to lease-type
22
management. Agreements with VHOs are designed to reduce the risk factors and hotel owners’
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23
24 value of investments. For example, one interviewee highlighted the mutually beneficial
25 agreements and commitments:
26
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“We invest funds or transformational capital expenditure to the property partner if they do not have
27
28
enough capital to meet our facilities’ standards. Hence, we help them through investment without
29 return within the contract period.” (M11)
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30 “One of the advantages of partnering with VHO is that they provide a fixed monthly deposit
31 according to the initial agreement, which helps us. Suppose we are looking at the capacity of our
32
hotel right now below 50%, with the security deposit. In that case, we can cover operational costs.”
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33
(O1)
34
35 Interviewees also mentioned that the expansion process should be consistent to increase
36
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revenue and profits for companies and their partners. Ultimately, the objective of partnerships
37
38 with hotel owners is to maintain sustainability and commitment together:
39 “We want our property partners to achieve their targeted revenue and business sustainability. This
40
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means financial, products, and services consistency and a long-lasting partnership.” (M6)
41
42 Evidently, one emerging factor is the adaptation to local culture. VHO management and
43 hotel owners were concerned with the varying conditions of SMSH operations. Most
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44
45
participants asserted that the educational background of employees and owners and
46 technological adaptation in hotels are still low. Therefore, VHO should adapt to the condition,
as mentioned by one of the hotel owners:
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47
48 “Because VHOs typically have standard operating procedures that are globally acceptable, this
49
start-up company should adapt to the condition of our people and our culture.” (O1)
50
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51 The business development division’s main objectives are acquiring hotel properties and
52 maintaining relationships with hotel owners.
53
54 “Business development is the one that initially acquired the property. For example, suppose the
igh

55 hotel property owners want to join. In that case, business development will explain the terms and
56 conditions, and they will acquire the property through an agreement that has been agreed to by the
57 hotel property owner.” (M5)
58
As a hotel management company, VHOs should adapt and adjust their approach to
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59
60 maintaining communication and agreement with hotel property owners. Therefore, they should
8
Page 9 of 22 Journal of Hospitality and Tourism Insights

1
2
3 keep a mutually beneficial agreement, focus on commitment, and continuously improve as part
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4
5
of excellent business in the hospitality field. These results coincide with previous studies on
6 understanding customer orientation relationships (Padilla-Meléndez and Garrido-Moreno
ur
7 2014).
8
9
4.2 Marketing factors
na
10
11
While segmenting the market, VHO management conducts a comprehensive market survey
12 assessment process. From the interview results, VHO management and hotel owners frequently
lo
13 mentioned such factors as marketing strategies, market segmentation, pricing strategy,
14 branding, promotion, and distribution channel. Findings reveal that the weak position of small
15 hotels in the market could be circumvented through VHO marketing and promotion strategies.
16
fH

17 “The VHO creates the marketing and promotion strategy for us. Previously, we had limited
18 marketing channels; we only sold our rooms on several property listing platforms. After the
19 partnership agreement, the VHO improved our online and offline presence.” (O7)
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20 “We informed the owners of essential data about market intelligence, market surveys, and pricing
21
strategies. We can decide the price level following market needs.” (M7)
22
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23 Consistent with the extant research, the importance of strategic marketing planning in JV
24 hotels relates to joint advertising, pricing, promotion, and market research activities (Li et al.
25 2006). Another found that VHO management and hotel owners also conveyed the importance
26
of branding for sales and pricing strategy. Property owners will automatically join their
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27
28 branding when they agree to partner with VHOs. From the perspective of management, brand
29 image is currently an essential aspect of VHOs’ success; interviewees further explain this:
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30
“Better branding can be achieved by selling more exposure. For example, outdoor neon boxes with
31
the VHO logo and property name are helpful for branding.” (M12)
32
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33
34
The findings coincide with the argument of Hua et al. (2009) on how brand equity increases
35 customer intention to purchase hotel products. Hotels reach a considerably broad audience
36 through responsive platforms, increase distribution, and build branding and operational
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37 efficiency. An effective way is maximizing online media marketing channels, in which mobile
38 applications become a key strategy to bring customers close to the hotel chain. The VHO
39 mobile application enables customers to book rooms with three taps on their smartphones
40
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easily. Strategic partnerships with online travel agents (OTAs) also enable hotel owners to
41
42 reach a broad consumer market (Yin et al. 2019).
43 “The difference is in terms of operation. For example, in conventional hotels, the booking process
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44 until the check-in process requires an exhausting process. However, at VHO, the booking process
45 is much simpler—using a mobile application makes everything much easier and more comfortable.”
46
(M8)
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47
48
49
50 Previous studies have discussed that the importance of online and digital distribution
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51 channels for budget hotels is the ability to market their properties via multi-channel strategies
52 (Law et al. 2015; Lei et al. 2019). Leveraging dynamic marketing capabilities through online
53 distribution plays a critical role in developing SMSHs’ competitive advantage (Beritelli and
54
igh

Schegg 2016; Elsharnouby and Elbanna 2021)

55
56
57
58
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59
60
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 Journal of Hospitality and Tourism Insights Page 10 of 22

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urn
1
2
3 Table 2.
4

al
CSFs for VHO partnerships with SMSHs
5
6

of
7 Salient Themes Sub Themes Key Insights
8 Partnership factors ● Client relationship The negotiation process and policies on the business expansion of

Ho
9 ● Contract agreement VHOs in the SMSH sector. The partnership between both parties
10 ● Constant improvement maintains the sustainability of the VHO business model and their
11

sp
● Adaptation to local culture commitment to the contract agreement.
12
● Business development
13

ita
Marketing factors ● Marketing and promotion strategies Marketing is part of functional CSFs, in which several categories are
14
● Market segment assessed: effectiveness of advertising, market intelligence, customer
15
● Pricing strategy database, and competitor intelligence.

lity
16
17 ● Branding
18 ● Distribution channel
Technical factors ● Hotel operation management Managing hotel operations and the standard is associated with

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19
20 ● Accessing and monitoring customer satisfaction applying technology to reach the VHO goals and hotel owners’
21 ● Standardization revenue targets.

dT
22 ● Transformation
23 ● Professionalism
24 Financial factors ● Capital expenditure Financial factors are important in measuring revenue and

ou
25 ● Investor and capital sources profitability.
26 ● Profitability

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27 ● Monthly guarantee
28 ● Revenue

m
29 Strategic management ● Innovation strategy Strategic management is related to innovation strategy and perceived
30 factors ● Hotel network size and coverage as the most critical factor for small hotel businesses.

Ins
31 ● Audit quality
32
Human factors ● Training VHO management and hotel owner participants agree that the human
33
● Team commitment factor is crucial in improving the standard and service of VHO,

igh
34
35
● Staff recruitment and selection primarily due to training.
36 ● Employee rewards and benefits

ts
37 Technology factors ● Property management system VHOs rely on technology-based solutions and features. They use
38 ● Central reservation system accuracy and efficient, accurate, consistent property management, and centralized
39 efficiency booking and reservation systems.
40
41 10
42
43
44
45
46
Page 11 of 22 Journal of Hospitality and Tourism Insights

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3
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4
5
4.3 Technical factors
6 VHO management and hotel owners discuss technical aspects, such as hotel operation
ur
7 management, access and monitoring customer satisfaction, standardization, property
8 transformation, and staff professionalism. Before joining VHOs, hotel partners must undergo
9 a transformation process that ensures that hotel services, the system, management, and staff
na
10 will meet the VHO standard:
11
12 “We must transform owner property: it is very crucial to transforming. Everyone engages in the
lo
13 process and convinces owners to share the same perspective.” (M7)
14
15
From interviews with hotel property owners, hotel operation management factors and
16 assessing and monitoring customer satisfaction are crucial regarding technical CSFs.
fH

17 Participants are concerned with the continuity of the day-to-day hotel operations, which they
18 describe as a follow:
19
“The VHO helps owners manage hotels regarding administration, services, and product
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20
21 standardization. We will implement an operational standard for all accommodations that do not
22 have a star category. For this, we need people with diverse backgrounds who are specialists in areas
such as the front office, housekeeping, food, and beverages, including the banquet. We also need
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23
24 people who are strong in accounting.” (M7)
25 “Operational managers in each active region will manage and monitor hotel properties. From
26 personal experience, the owner feels comfortable with the operational manager. They can ask about
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27
hotel operations. We also often discuss and share knowledge about hotel management, it will help
28
in the future relationship with owners, and there is an exchange of ideas.” (M15)
29
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30 “As a digital hospitality company and hotel aggregator, we offer economical and more affordable
31 accommodation and are concerned about the quality of our services. Therefore, we should offer a
32 balance between the two aspects (affordable and quality services).” (M12)
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33
34 The physical product and service quality of SMSH operation are crucial (Hua et al. 2009;
35 Zhang et al. 2013). Customer orientation is also crucial for the hotel business (Padilla-
36 Meléndez and Garrido-Moreno 2014) to enhance service quality, deliver superior customer
dT

37 service, and total quality management (Wang et al. 2012; Ahmad and Arif 2016).
38 The hotel industry is a service sector that highly depends on human aspects. Following
39
40
Brotherton and Shaw (1996) in the three-dimensional hotel operations model, technical aspects
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41 determine the efficiency and economy scale for the successful delivery of hospitality goods
42 and operations. Standardization and quality of the services system should be adopted to predict
43 and control output activities (Ivanova and Rahimi 2016): the higher the hotel network’s
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44 intangible assets (including their standards, facilities, and services), the better they can
45 command presence in the customer psyche (Andreu et al. 2017). Thereafter, VHOs conduct an
46
evaluation process on how hotels obtain a satisfactory level of guest assessment:
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47
48 “We measure the customer satisfaction index (CSI) and develop a net promoter score (NPS) to
49 measure guest satisfaction.” (M7)
50
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51 CSI is developed from customers’ ratings of their likelihood to recommend VHO products
52 and services to others on a scale of 0 (lowest) to 10 (highest). Hotel owners also explained that
53 these factors are significant for their businesses. VHO management ensures that guests are
54 satisfied and evaluate actions to maintain the quality standard. Moreover, customer satisfaction
igh

55 leads to a positive financial performance, in which financial figures are essential for further
56
adjustment and corrective action (Zhang et al. 2013; Augustyn et al. 2021).
57
58
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59
60
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 Journal of Hospitality and Tourism Insights Page 12 of 22

1
2
3 4.4 Financial factors
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4
5
Owners expressed the current difficulty in obtaining bank loans for their needs. With the
6 cooperation of VHOs, hotel owners now have finances in the form of capital expenditure along
ur
7 with a monthly income guarantee. Capital expenditure becomes an attractive factor for hotel
8 owners. VHOs invest in their partners by supplying capital investment assistance and a monthly
9 income guarantee. For property owners, capital expenditure has become a significant factor in
na
10 the development process:
11
12 “What is significant is the contract agreement because it provides business capital and other
lo
13 investment facilities.” (M5)
14
15 Financial support is crucial for hotel JV collaborations (Li et al. 2006; Ge et al. 2018). The
16 financial performance factor in hotels can be measured by the rate of return on investment,
fH

17 income, costs incurred for operations, and company profitability (Avcikurt et al. 2011; Padilla-
18 Meléndez and Garrido-Moreno 2014).
19
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20
21 4.5 Strategic management factors
22 Strategic management is related to innovation strategy and is perceived as the most critical
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23 factor for hospitality businesses (Stylos et al. 2021; Dieguez et al. 2022). Strategic management
24 involves executive management determining strategy and objectives to achieve goals (Geller
25
1985). Strategy and objectives will give better and more precise guidance to solve problems
26
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27 and measure operational success following organizational goals. Thus, this situation
28 demonstrates the importance of establishing shared values and launching goals and systems to
29 increase customer satisfaction (Arasli 2012). One interviewee mentioned the increasing
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30 number of users in the VHO application as an opportunity to receive more value from
31 customers and increase the chance of getting more investment. The VHO management also
32 highlights this:
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33
34 “From the next one to two years, we are constantly innovating. We must continue to demand
35 innovative ideas every day, ones that are out of the box and all kinds; it has become part of our
36 corporate culture.” (M16)
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37
38 Innovative technology should be based on market research to respond to market needs and
39 demands, as mentioned by the management of a VHO:
40
ou

“We do marketing based on research to the standards that we set. The products we offer should
41
meet the category of value for money.” (M6)
42
43 The next factor is related to the size and coverage of the hotel network. Geographical
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44 coverage is vital for hotels: such a coverage helps in the success of hotel operations and
45 development (Brotherton 2004a; Hua et al. 2009). A larger hotel scale size and coverage of
46
hotel networks are also critical. For VHOs, the number of existing properties and personnel in
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47
48 one country helps in the effective selling and monitoring process:
49 “Of course, we have one competitive advantage in the network. We have the most expansive
50 network. The advantage lies in our capacity to sell properties in every city, even in other countries
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51 abroad, regarding networking, standardization, and the number of personnel. We have all the
52
support needed in every region or hub for our operations.” (M11)
53
54 Another factor is related to how VHOs enhance the quality of services. It is a crucial
igh

55 strategy employed by hotel owners or managers in SMSHs to face business challenges (Ahmad
56 and Arif 2016). Implementing quality audits through VHO management by placing its
57
58
personnel to monitor the operations of property hotel partners has increased customer
confidence in using accommodation provided by VHOs. A quality audit guarantees that the
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59
60 products and services they provide meet a minimum standard despite having differentiated
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Page 13 of 22 Journal of Hospitality and Tourism Insights

1
2
3 properties managed by VHOs. The strategy to ensure quality assurance in hotel operational
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4
5
management can be carried out through standard operating procedures, regulations, and, most
6 importantly, the human factor and the organization (Fredrick 2019; Elsharnouby and Elbanna
ur
7 2021).
8
9
na
10 4.6 Human factors
11 Training is part of CSFs for VHOs, as mentioned by most participants. It aims to provide
12 standard operational management and increase customer satisfaction with VHOs’ products and
lo
13 services. The lack of skilled employees in customer service becomes a challenging issue for
14 SMSHs. Thus, standard hotel operation management for all VHO properties can be improved
15 by conducting training and coaching. Two interviewees mentioned:
16
fH

17 “First is an improvement; we then also built educational training for hospitality.” (M3)
18
“The VHO thinks about the employee’s development, and the hotel owners as well.” (M11)
19
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20 Owners agree that VHOs could develop hotel operation human resources. VHOs change
21 product knowledge and the ability to upgrade the technology used by the hotel staff to help
22
operations. Owners feel improvement in knowledge transfer during the in-house training
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23
24
process. Most owners agree that VHOs continually innovate and develop technologies related
25 to property management systems, hardware, and mobile application. Therefore, training is for
26 employees and owners. One owner stated:
ali

27
“Our company is successful because we think about our employees’ development. However, the
28
training is not only for employees but also for the owners. We meet with the owners and mentor
29
them on managing the hotel.” (M7)
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30
31 The finding supports Ahmad and Arif (2016), which posited that training increases business
32 success in the SMSH sector. Training for employees improves customer service (Hua et al.
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33
2009). From the characteristics of company owners, top-level management is needed to
34
35 overcome the challenges in such a dynamic business climate. The need for an innovative and
36 sound strategy should be supported by quality leadership team commitment. Increasing team
dT

37 commitment is vital to achieving organizational goals. Organizations’ process management is

38 essential to teamwork and strategic plans (Yadegaridehkordi et al. 2018). VHOs also consider
39 employee welfare aspects owing to work–life balance. Accordingly, employee rewards
40 emerged as one of CSFs for VHOs. As previously mentioned by one VHO management
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41
42
participant:
43 “Company performance and targets are balanced with our reasonable compensation and rewards.”
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44 (M14)
45
46
m

47 4.7 Technology factors

48
49
VHOs are hospitality management companies that utilize technological developments to
50 maximize and empower local accommodation offerings. Only two CSFs in technology factors
Ins

51 were found herein: property management system (PMS) and accuracy and efficiency of the
52 central reservation system.
53
“We are a start-up company that relies on technology. Our system keeps improving by getting
54
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55
insights from our hotel operation team, although we already have a software engineering team. The
56 improvement comes in more user-friendly PMS for the employee and owners. This technology was
57 beneficial since hotels did not need large folio books and dealt with a large margin of errors and
58 time-consuming paperwork. With this PMS, business processes for the hotel property have run
ts

59 more efficiently.” (M7)

60
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1
2
3 The use of data science and analytics to enhance the guest experience has become crucial
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4
5
to operations. Systems are transparently accessed in real-time to improve efficiency in time
6 and funding. Moreover, using technology creates a more comfortable booking experience for
ur
7 guests, in which consumers go online and make travel-related purchases using online
8 platforms.
9
na
10
“What makes VHO different is promotions on the website and online travel agents, which will
11 impact small hotel property partners. When they join us, we will help their property become more
12 profitable by improving their online platform appearance.” (M15)
lo
13 Websites and mobile applications will reach a broader audience, increase distribution, and
14
improve branding and operational efficiency. Mobile applications enable customers to book
15
16 rooms with just three taps of their smartphones. The concept is simple because it provides three
fH

17 steps for booking: visit the website/mobile application, choose a location, and find the hotel
18 that fits the tourists’ requirements. This outcome supports theories that note the importance of
19 a central reservation system in SMSHs and the budget hotel sector (Brotherton 2004a; Hua et
os

20 al. 2009; Avcikurt et al. 2011).

21
22 “SMSHs partners will also get hotel management system applications that are beneficial to the
owner in the process of checking and performance of their properties every day through a device
pit

23
24 they have.” (M11)
25
26
ali

27 4.8 CSFs for VHOs

28 Seven themes were conveyed by the management and hotel owners, with five themes being
29 consistent with the extant studies: strategic management, human, technical, marketing, and
ty

30
technology factors. Meanwhile, the interviews discovered two new themes: financial and
31
32 partnership factors.
In the current study, the partnership factors received the highest weight among other CSFs.
an

33
34 VHOs, as light asset companies, must maintain their property partners to sustain and expand
35 the business. The relationship between VHOs and clients, such as commitment, delivering
36 information, communication, and troubleshooting, is part of VHOs’ goals to maintain
dT

37 partnerships with hotel owners. These findings extend the literature on customer orientation
38
39
relationships (Padilla-Meléndez and Garrido-Moreno 2014). However, the partnership between
40 VHOs and non-classified hotels continues to face challenges. Unclassified hotels have no
ou

41 experience using technology and managing standardized hotel management systems. The
42 transformation process to become a markedly reliable accommodation prioritizing quality and
43 providing a pleasant stay experience supports the findings of Arasli (2012).
ris

44 Hotel businesses need marketing strategies to maximize revenue and increase occupancy
45
rates. Marketing factors are the second most mentioned herein. Management and owners have
46
the same perspective, mentioning five factors: marketing and promotion strategies, market
m

47
48 segmentation, pricing strategy, branding, and distribution channel. The importance of strategic
49 marketing planning in JV hotels is connected to joint advertising activities, pricing strategy,
50 promotion activities, and market research activities, as previously mentioned by Li et al.
Ins

51 (2006). Marketing and sales are part of functional CSFs, in which several categories are
52 assessed: effectiveness of advertising, market intelligence, customer database, and competitor
53
intelligence (Brotherton et al. 2003; Brotherton 2004b). The emergence of VHOs on various
54
igh

55 social media platforms is also beneficial— the use of the Internet as a marketing medium, as
56 explained in the literature, impacts the promotion of the business. The use of websites as
57 promotional media and customers being part of the promotional activities by VHOs are
58 supported by Ahmad and Arif (2016) and Arasli (2012).
ts

59 The third aspect is technical, such as hotel operation management, standardization,

60
14
Page 15 of 22 Journal of Hospitality and Tourism Insights

1
2
3 transformation, and personnel professionalism. Participants are concerned with the continuity
Jo
4
5
of day-to-day hotel operations. Brotherton and Shaw (1996) outlined a centralized reservation
6 system that is efficient, accurate, and consistent in the quality of the products and facilities
ur
7 offered; this result is relevant to the current study’s findings on using PMS and standardizing
8 hotel operations by VHOs, including the importance of accessing and monitoring customer
9 satisfaction. Customer satisfaction leads to a positive financial performance, in which financial
na
10 figures reflect the needed further adjustment and corrective action (Zhang et al., 2013). Thus,
11
customer-related measures and customer orientation in customer relationship management
12
implementation are key factors for hotel success (Padilla-Meléndez & Garrido-Moreno, 2014).
lo
13
14 The fourth aspect is the financial aspect. Financial support is crucial for hotels’ JV
15 collaborations (Li et al., 2006). VHOs invest in their partner/s by supplying capital investment
16 assistance, including capital expenditure and sources. One stated:
fH

17
18 “It is difficult to get bank loans for hotel business needs. With the cooperation of VHOs, hotel
19 owners now have finance in the form of capital expenditure and a monthly income guarantee.”
os

20 (O3)
21
The increase in revenue and profitability should be measured, which is one of VHOs’
22
goals. From the literature on hotel CSFs, the financial performance factor is the revenue, rate
pit

23
24 of return on investment, income, costs incurred for operational activities, and the company’s
25 profitability (Avcikurt et al., 2011; Padilla-Meléndez & Garrido-Moreno, 2014).
26
The fifth aspect is strategic management. This study revealed that innovation strategy is
ali

27
28 perceived as the most important factor for a small hotel businesses. In the digital era,
29 conventional SMSHs should transform their businesses to adapt to the technology and
ty

30 continuously innovate. Another critical factor is the size and coverage of the hotel network: a
31 larger hotel scale size and coverage of the hotel network are also critical. Geographical
32 coverage is important for hotels because it helps in the success of hotel operations and
an

33
development (Brotherton, 2004a; Hua et al., 2009). The next most important factor is the
34
35
implementation of quality audit by VHO management by placing its personnel to monitor the
36 operations of property hotel partners. The practice increases customer confidence in using
dT

37 accommodations provided by VHOs, guaranteeing that the products and services they provide
38 meet a minimum standard despite having differentiated properties managed by VHOs. Several
39 initiatives include training, team commitment, staff recruitment, and employee incentives.
40 In the sixth aspect, VHO management and hotel owner participants agreed that the human
ou

41
factor is also crucial in improving the standards and services of VHOs. Therefore, the human
42
43 aspect is crucial for all operational aspects of the hotel business (Brotherton & Shaw, 1996).
Organizational productivity related to staff recruitment by finding the right people in an
ris

44
45 organizational structure’s proper position, coupled with team commitment, is pivotal for
46 business success. Otherwise, lacking skilled employees to handle customers becomes a
m

47 challenging firm issue (Ahmad & Arif, 2016).

48 The last aspect of technology was found herein, namely, PMS, which presents information
49
50
transparently and is used to improve efficiency in both time and funding. The second is the
Ins

51 accuracy and efficiency of the central reservation system. Findings support previous studies on
52 using a property management system (Sharma et al., 2017; Wiastuti and Susilowardhani,
53 2017).
54
igh

55 5 Conclusions
56
This study revealed seven themes of CSFs for VHOs and SMSHs, as conveyed by the
57
58
management and hotel owner participants during the interviews: five themes were based on the
ts

59 literature review (i.e., strategic management, human, technical, marketing, and technology
60 factors), while two new themes were discovered from the interviews (i.e., financial and
15
 Journal of Hospitality and Tourism Insights Page 16 of 22

1
2
3 partnership factors). From the VHO management perspective, the most critical factor for VHOs
Jo
4
5
is the technical aspect, including standardization, transformation, quality assurance, and
6 professionalism. From the owners’ perspective, financial aspects were the most critical factors
ur
7 for VHOs, particularly on the monthly guarantee. The owners also explained that the
8 technology aspect has helped them manage their hotel property through the PMS and central
9 reservation systems. Clients’ relationship was also found to be crucial from the perspectives of
na
10 both VHO management and hotel owners.
11
Hotel owners and VHO management has enabled the confirmation and refinement of the
12
new CSFs framework for VHOs, serving as a foundation for the concepts and characteristics
lo
13
14 of VHOs. This study’s results show that the most CSFs for VHOs is the partnership factor.
15 Partner selection is also a primary factor for success in establishing a joint venture. When
16 creating an IJV, trust, commitment, and congruent goals are highlighted as important factors
fH

17 in the relationship with a partner. They are essential for the relationship’s success (e Silva and
18 Oliveira 2017). Maintaining good client relationships is likewise invaluable in increasing brand
19
value and achieving goals of increased property portfolios: which are needed to become a
os

20
21 market leader (Castañeda García et al. 2018; Wang et al. 2019).
22 In cooperation and networking, Li et al. (2006) examined the primary motivation for
pit

23 selecting JV partners from local and expatriate managers’ perspectives. Factors relevant for JV
24 hotels include strategic planning, willingness to share information and knowledge with local
25 partners, support for strong financial performance, and experience in marketing, planning, and
26 conducting market research. Moreover, innovations and financial factors were pivotal,
ali

27
28
especially from the perspective of hotel owners. Note that another highlight was the creation
29 of marketing and promotional strategies through multiple media channels, such as by using
ty

30 online, offline, and micro marketing media. Strategies should be inexpensive and effective
31 platforms for marketing and advertising, thereby increasing hotels’ competitiveness level in
32 the marketplace (Paprocki 2017; Stylos et al. 2021).
an

33
34 5.1 Theoretical implications
35 The theoretical implications of this study are threefold. First, this study expands the literature
36
dT

37
on the use of technology in hospitality management, particularly on the application of
38 technology for SMSHs in collaboration with emerging highly technologically dependent hotel
39 management companies, such as VHOs. Second, the current research contributes to the body
40 of literature on hospitality management by providing an overview of the role of hotel operators
ou

41 in cooperating with SMSH owners. The perspectives discuss hotel management agreements
42 (HMAs), partnerships between owners and hotel operators, and affiliations with the hotel
43
industry through a 4.0 smart technology implementation. Third, this study finally provides
ris

44
45
perspectives from hotel owners on the contract agreements, the financial benefits obtained from
46 the cooperation process, and hotel management operations utilizing innovative technology.
Smart innovation for hotels uses cutting-edge technologies to improve efficiency, reduce costs,
m

47
48 and enhance customer experience, including VHOs, automated check-in/check-out systems,
49 digital keyless entry systems, artificial intelligence (AI), and chatbots. By leveraging these
50 technologies, hotels can provide a better overall experience for their guests and increase
Ins

51
operational efficiency.
52
53
54 5.2 Practical implications
igh

55 For hotel owners, a virtual hotel business can be used as a solution for service quality and
56 marketing and promotion strategy in the current digital era. Moreover, hotel operators can
57 determine CSFs from the owners’ interests (i.e., providing expertise in the marketing process
58 and promotion strategy and implementing standards and training for hotel operations by
ts

59
60
prioritizing aspects of digital technology). Hotel management should allocate budget for
16
Page 17 of 22 Journal of Hospitality and Tourism Insights

1
2
3 information systems and update their technology on their daily operations while maintaining
Jo
4
5
the data management process. Findings will help VHO management determine the most
6 significant CSFs to achieve their goals, measure performance, and expand their business
ur
7 networks. In addition, this study will help inform the government to create policies on how
8 SMSHs can be transformed into standardized accommodations. Accordingly, it will support
9 local tourism, particularly in developing countries, such as Indonesia, India, the Philippines,
na
10 and Vietnam. Most accommodations are in the SMSH categories.
11
12
5.3 Limitations and Future Research
lo
13
14 For the number of participants, this study’s sample size (nine properties) is still small compared
15 with the total number of VHOs available globally. Another limitation is that the sample
16 interview participants were only from VHO properties in Indonesia. With the limitation on
fH

17 domestic travel during the COVID-19 pandemic, the researcher cannot directly observe the
18 conditions of hotels included in this study. Thus, future studies can be conducted and compared
19
from such countries as China, India, Singapore, Thailand, the Philippines, the US, and
os

20
21 Vietnam, where VHOs primarily operate. Future studies may also include participants who are
22 hotel owners but have not joined or have ended their contract agreements with VHOs. Future
pit

23 scholarly attention could compare their perspective on VHOs and hotel management
24 agreements.
25
26
ali

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ORIGINALITY REPORT

6 %
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Study", Tourism Review International, 2016
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Nilashi, Mohd Hairul Nizam Bin Md Nasir,
<1 %
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hotel success and development using
Structural Equation Modelling (SEM)-ANFIS
method", Tourism Management, 2018
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prism.lib.asu.edu
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Technologies in Tourism 2021", Springer
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Nikolaos Stylos, Anestis K. Fotiadis, Donghee
(Don) Shin, Tzung-Cheng TC Huan. "Beyond
<1 %
smart systems adoption: Enabling diffusion
and assimilation of smartness in hospitality",
International Journal of Hospitality
Management, 2021
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Roya Rahimi, Mehmet Ali Köseoglu, Ayse
Begum Ersoy, Fevzi Okumus. "Customer
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and hospitality: a state-of-the-art", Tourism
Review, 2017
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CSFs_for_Virtual_Hotel_Operator_manuscript.docx
GRADEMARK REPORT

FINAL GRADE GENERAL COMMENTS

/100 Instructor

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Dear Dr Nikolaos Stylos,
Editor for Special Issue on Marketing via Industry 4.0 smart technologies in hospitality and
tourism in Journal of Hospitality and Tourism Insight (JHTI)

We wish to submit an article entitled " Critical success factors for virtual hotel operator
partnership with small and medium-sized hotels: the perspective of owners' and operators'
" for consideration in the upcoming call for special issues Marketing via Industry 4.0 smart
technologies in hospitality and tourism for the Journal of Hospitality and Tourism Insight
(JHTI).We confirm that this work is original and has not been published elsewhere, nor is it
currently under consideration for publication elsewhere.

In this paper, we report on Virtual Hotel Operator (VHO) as one type of hospitality management
company that takes advantage of technological developments to maximise sales and empower
small- and medium-sized hotels (SMSHs). The central question in this paper asks what the
critical factors contributing to the success of the VHO partnership with SMSHs are. This study
used a qualitative approach; data were acquired from 25 semi-structured interviews. This study
used thematic analysis; data analysis was conducted inductively to elicit themes within the
marketing, technology, partnership, financial, strategic management, technical and human
factors.

This study contributes to the literature on CSFs in the context of VHOs as part of the hospitality
sector. The findings reveal that the existence of VHO in the hotel industry will have a symbolic
impact on mutualism for SMSHs by improving service, product standards, and marketing
capabilities to increase SMSHs competitiveness and ease transactions for customers. Moreover,
the implications of this study will be helpful for VHO management in determining the most
significant CSFs for such companies to measure their business performance and increase
resilience in the accommodation sector.

We believe this manuscript is appropriate for consideration in current special issues. Our study
focuses on incorporating and assessing the impact of new smart applications on tourism and
hospitality organisations' business performance and how small and medium-sized organisations
in the tourism sector can leverage smart technologies for increased competitiveness.
We have no conflicts of interest to disclose. We would be happy to receive comments and
suggestions for improving this manuscript.

We want to thank you for the editors' consideration of this manuscript.

Sincerely,
Fajar Kusnadi Kusumah Putra
(Corresponding author)
Sekolah Tinggi Pariwisata Bandung Mail - Journal of Hospitality and... https://mail.google.com/mail/u/2/?ik=147e00cb67&view=pt&search=...

Fajar Putra <[email protected]>

Journal of Hospitality and Tourism Insights - JHTI-06-2022-0244

4 messages

15 June 2022 at
Journal of Hospitality and Tourism Insights <[email protected]>
10:55
Reply-To: [email protected]
To: [email protected]

15-Jun-2022

Dear Dr. Fajar Putra

Your manuscript entitled "Critical success factors for virtual hotel operator partnership with small and medium-
sized hotels: the perspective of owners' and operators'" has been successfully submitted online and is presently
being given full consideration for publication in the Journal of Hospitality and Tourism Insights.

Your manuscript ID is JHTI-06-2022-0244.

Please mention the above manuscript ID in all future correspondence or when calling the office for questions. If
there are any changes in your street address or e-mail address, please log in to ScholarOne Manuscripts at
https://mc.manuscriptcentral.com/jhti and edit your user information as appropriate.

You can also view the status of your manuscript at any time by checking your Author Centre after logging in to
https://mc.manuscriptcentral.com/jhti.

Please note that Emerald requires you to clear permission to re-use any material not created by you. If there are
permissions outstanding, please upload these when you submit your revision or send directly to Emerald if your
paper is accepted immediately. Emerald is unable to publish your paper with permissions outstanding.

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If you would like to publish your article open access please contact [email protected]

Thank you for submitting your manuscript to the Journal of Hospitality and Tourism Insights.

Yours sincerely,
Fevzi Okumus
Journal of Hospitality and Tourism Insights Editorial Office

https://orcid.org/0000-0002-4123-559X

Fajar Putra <[email protected]> 15 June 2022 at 10:59

To: roblaw <[email protected]>

Dear Professor Rob Law,

Pleased to inform you that our article title: "Critical success factors for virtual hotel operator partnership with
small and medium-sized hotels: the perspective of owners' and operators'" has been successfully submitted
online to Journal of Hospitality and Tourism Insights.Will keep you updated for the future status of this
manuscript.

Kind regards,

1 of 4 04/06/2023, 19:44
Sekolah Tinggi Pariwisata Bandung Mail - Journal of Hospitality and... https://mail.google.com/mail/u/2/?ik=147e00cb67&view=pt&search=...

Fajar Putra <[email protected]>

Journal of Hospitality and Tourism Insights - Decision on Manuscript ID

JHTI-06-2022-0244.R1
6 messages

17 October 2022 at
Journal of Hospitality and Tourism Insights <[email protected]>
14:21
Reply-To: [email protected]
To: [email protected]

17-Oct-2022

Dear Dr. Fajar Putra

Manuscript ID JHTI-06-2022-0244.R1 entitled "Critical success factors for virtual hotel operator partnership with
small and medium-sized hotels: the perspective of owners' and operators'" which you submitted to the Journal of
Hospitality and Tourism Insights, has been reviewed. The comments of the reviewer(s) are included at the
bottom of this letter.

I invite you to respond to the reviewer(s)' comments and revise your manuscript.

To revise your manuscript, log into https://mc.manuscriptcentral.com/jhti and enter your Author Centre, where
you will find your manuscript title listed under "Manuscripts with Decisions." Under "Actions," click on "Create a
Revision." Your manuscript number has been appended to denote a revision.

You will be unable to make your revisions on the originally submitted version of the manuscript. Instead, revise
your manuscript using a word processing program and save it on your computer. Please also highlight the
changes to your manuscript within the document by using the track changes mode in MS Word or by using bold
or coloured text.Once the revised manuscript is prepared, you can upload it and submit it through your Author
Centre.

When submitting your revised manuscript, you will be able to respond to the comments made by the reviewer(s)
in the space provided. You can use this space to document any changes you make to the original manuscript.
In order to expedite the processing of the revised manuscript, please be as specific as possible in your response
to the reviewer(s).

IMPORTANT: Your original files are available to you when you upload your revised manuscript. Please delete
any redundant files before completing the submission.

Because we are trying to facilitate timely publication of manuscripts submitted to the Journal of Hospitality and
Tourism Insights, your revised manuscript should be uploaded as soon as possible. If it is not possible for you to
submit your revision in a reasonable amount of time, we may have to consider your paper as a new submission.

Once again, thank you for submitting your manuscript to the Journal of Hospitality and Tourism Insights and I
look forward to receiving your revision.

Yours sincerely,
Dr. Nikolaos Stylos
Guest Editor, Journal of Hospitality and Tourism Insights
[email protected]

Reviewer(s)' Comments to Author:

Reviewer: 1

Comments:
Please see the attached review comments.

Additional Questions:
1. Originality: Does the paper contain new and significant information adequate to justify publication?: Yes

1 of 9 04/06/2023, 19:45
Sekolah Tinggi Pariwisata Bandung Mail - Journal of Hospitality and... https://mail.google.com/mail/u/2/?ik=147e00cb67&view=pt&search=...

2. Relationship to Literature: Does the paper demonstrate an adequate understanding of the relevant literature
in the field and cite an appropriate range of literature sources? Is any significant work ignored?: I failed to see
how the authors addressed my comments from last round: "As the authors keep arguing, hotels using virtual
hotel operators is a joint venture. And the authors cites references related to joint ventures multiple times.
I'd like to see some literature review about CSFs
influencing joint adventures, and how these CSFs differs
from the factors identified in this paper".

3. Methodology: Is the paper's argument built on an appropriate base of theory, concepts, or other ideas? Has
the research or equivalent intellectual work on which the paper is based been well designed? Are the methods
employed appropriate?: In this round of revision, the authors addressed the issues I raised in last round. But the
writing of the revision needs to be improved. Please see my review comments in the attached file.

4. Results: Are results presented clearly and analysed appropriately? Do the conclusions adequately tie
together the other elements of the paper?: The authors indeed tried to revise the connection between the results
and the conclusion and discussion part. They are on the right track.
However, the writing of the discussion part need significant revision. Please see my review comments in the
attached file.

5. Practicality and/or Research implications: Does the paper identify clearly any implications for practice and/or
further research? Are these implications consistent with the findings and conclusions of the paper?: Yes

6. Quality of Communication: Does the paper clearly express its case, measured against the technical language
of the field and the expected knowledge of the journal's readership? Has attention been paid to the clarity of
expression and readability, such as sentence structure, jargon use, acronyms, etc.: It seems like that the authors
did not take my suggestion of using professional editing service to improve the readability of the paper.
The writing quality of the added sections is very poor in terms of the organizations, logic, wording and so on.
In my previous comments, I pointed out some parts needs clarification, grammar check, or rewording. However,
such issues and problems are not just limited to those I pointed out, and they are everywhere.

DEADLINE: 29-Nov-2022

To go straight to your paper, click this link: *** PLEASE NOTE: This is a two-step process. After clicking on the
link, you will be directed to a webpage to confirm. ***

https://mc.manuscriptcentral.com/jhti?URL_MASK=4c3531001fb94cd98d3de2a65b920e68

To help support you on your publishing journey we have partnered with Editage, a leading global science
communication platform, to offer expert editorial support including language editing and translation.

If your article has been rejected or revisions have been requested, you may benefit from Editage’s services. For
a full list of services, visit: authorservices.emeraldpublishing.com/

Please note that there is no obligation to use Editage and using this service does not guarantee publication.

R1-reviews.docx
27K

Fajar Putra <[email protected]> 9 November 2022 at 08:27

To: roblaw <[email protected]>

Dear Professor Rob Law,

I hope this email finds you well. I would like to inform you that our manuscript submission to Journal Hospitality
Tourism Insight (JHTI) entitled "Critical success factors for virtual hotel operator partnership with small and
medium-sized hotels: the perspective of owners' and operators' has been reviewed for the second round
(deadline for resubmit is due 29 November 2022). I have tried to address the reviewer comments (revised file
and authors comments are attached). However there are several issues that need to be highlighted from the
reviewer comments such as: The writing of the discussion part needs significant revision in terms of the

2 of 9 04/06/2023, 19:45
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Fajar Putra <[email protected]>

Journal of Hospitality and Tourism Insights - Decision on Manuscript ID

JHTI-06-2022-0244.R3
1 message

21 January 2023 at
Journal of Hospitality and Tourism Insights <[email protected]>
01:27
Reply-To: [email protected]
To: [email protected]

20-Jan-2023

Dear Dr. Fajar Putra

Manuscript ID JHTI-06-2022-0244.R3 entitled "Critical Success Factors for Virtual Hotel Operator Partnership
with Small and Medium-sized Hotels: The Perspective of Owners and Operators" which you submitted to the
Journal of Hospitality and Tourism Insights, has been reviewed. The comments of the reviewer(s) are included at
the bottom of this letter.

I invite you to respond to the reviewer(s)' comments and revise your manuscript.

To revise your manuscript, log into https://mc.manuscriptcentral.com/jhti and enter your Author Centre, where
you will find your manuscript title listed under "Manuscripts with Decisions." Under "Actions," click on "Create a
Revision." Your manuscript number has been appended to denote a revision.

You will be unable to make your revisions on the originally submitted version of the manuscript. Instead, revise
your manuscript using a word processing program and save it on your computer. Please also highlight the
changes to your manuscript within the document by using the track changes mode in MS Word or by using bold
or coloured text.Once the revised manuscript is prepared, you can upload it and submit it through your Author
Centre.

When submitting your revised manuscript, you will be able to respond to the comments made by the reviewer(s)
in the space provided. You can use this space to document any changes you make to the original manuscript.
In order to expedite the processing of the revised manuscript, please be as specific as possible in your response
to the reviewer(s).

IMPORTANT: Your original files are available to you when you upload your revised manuscript. Please delete
any redundant files before completing the submission.

Because we are trying to facilitate timely publication of manuscripts submitted to the Journal of Hospitality and
Tourism Insights, your revised manuscript should be uploaded as soon as possible. If it is not possible for you to
submit your revision in a reasonable amount of time, we may have to consider your paper as a new submission.

Once again, thank you for submitting your manuscript to the Journal of Hospitality and Tourism Insights and I
look forward to receiving your revision.

Yours sincerely,
Dr. Nikolaos Stylos
Guest Editor, Journal of Hospitality and Tourism Insights
[email protected]

Reviewer(s)' Comments to Author:

Reviewer: 1

Recommendation: Major Revision

Comments:
Thank you for the opportunity to review your paper. I offer several suggestions for improvement, which I hope will
be helpful to the author(s).

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Introduction:

VHO – provide a definition, description, and examples in the introduction. What are VHOs? What is their
business model? Provide examples of VHOs and trends/growth in the number of VHOs. Are VHOs based on the
use of smart technology? How exactly? etc. Make sure that the positioning and explanations offered in the
introduction can position the paper within the smart technology literature.

Literature review:

Second paragraph – more explicitly explain the two models you mention (management and franchise). Be direct
(don’t use former and latter). The paragraph reads convoluted now. As before, provide examples for each model,
so it is clear to the reader what you are talking about.
Section 2.3 Critical Success Factors (CSFs) influencing joint ventures in hospitality business – this section is
confusing. Are VHOs joint ventures? From the little explanation you provide about VHOs, they don’t seem to be
based on a joint venture model. However, if they are, then you have to be explicit about it, and explain the model
their follow. How is the JV literature relevant? If VHO are not using JV (or if this is not your primary concern for
your paper), then this section should be deleted (along with other mentions of JV throughout the paper). You
mention within this section strategic alliances. While strategic alliances share characteristics with JV, they are not
JV. Altogether I struggled to identify how this section adds value.

What is the theoretical perspective within which you position your study? You talk about critical success factors,
but what theory is behind them? You should include a theoretical discussion.

Methodology:

Is your focus on the small hotel owners? Or the VHO? Or both? In the methodology, you say “Exploratory
research is therefore needed to understand the hotels' owners' perspectives on their partnerships with VHO to
identify the CSFs for VHO”. However, later on you talk about the recruitment of VHO management. It is not clear
where the focus is. You should be more specific.
Your context – Indonesia – needs to be properly introduced and explained. What is interesting / unique about the
context and VHO?
When describing the sample, please indicate how many different VHOs were represented, and if possible
characteristics of those VHOs.

Results and discussion:

Since this is a qualitative study, please use the word findings instead of results. In section 4.1. you say that
“Client relationship received the highest weight among the partnership factors”. How did you measure the
weight? Again, this is a qualitative study. If you make a claim like this, you should be able to justify it (or
alternatively, please modify the wording).
In section 4.2. marketing factors, you talk about marketing and promotion strategies. However, promotion is part
of marketing. So are all the other factors you mention such as market segmentation, pricing strategy, branding
and distribution channel. Please modify the wording to reflect the fact that all those (including promotion) fall
under the umbrella of marketing.
You discuss 7 different success factors. Please graphically represent the relationships among those factors. How
are they linked to each other? Do they reinforce each other? Crucially, how is technology related to the rest of
the factors?

Conclusion:
The theoretical implications section needs to be elaborated and expanded. Make sure to explicitly identify your
theoretical contributions in light of the smart technology focus of the SI.

Other issues:
The paper needs to be reviewed by a professional copywriter for flow and grammar.

Additional Questions:
1. Originality: Does the paper contain new and significant information adequate to justify publication?: The paper
needs to be significantly revised to highlight its potential originality and contribution.

2. Relationship to Literature: Does the paper demonstrate an adequate understanding of the relevant literature
in the field and cite an appropriate range of literature sources? Is any significant work ignored?: Adequate

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understanding of the literature in general. However, the literature on smart technology should be enhanced,
along with how VHOs relate to this literature.

3. Methodology: Is the paper's argument built on an appropriate base of theory, concepts, or other ideas? Has
the research or equivalent intellectual work on which the paper is based been well designed? Are the methods
employed appropriate?: Methods are appropriate. However, the paper lacks a theoretical grounding.

4. Results: Are results presented clearly and analysed appropriately? Do the conclusions adequately tie
together the other elements of the paper?: The findings need to be enhanced.

5. Practicality and/or Research implications: Does the paper identify clearly any implications for practice and/or
further research? Are these implications consistent with the findings and conclusions of the paper?: Implications
are adequate, but need to highlight more clearly the theoretical implications.

6. Quality of Communication: Does the paper clearly express its case, measured against the technical language
of the field and the expected knowledge of the journal's readership? Has attention been paid to the clarity of
expression and readability, such as sentence structure, jargon use, acronyms, etc.: The paper can benefit from a
professional copyediting.

Reviewer: 2

Recommendation: Major Revision

Comments:
The study enriches the current knowledge and contributes to emerging research directions and new research
patterns. However, and the theory/ bibliography may be further boosted in certain sections mentioned below
particularly in regards with DT and VHOS. Moreover, authors are encouraged to provide more practical examples
of VHOs from tourism industry.

However, proofreading is needed, as while the study is so interesting, sometimes I have some difficulties
following the paper because of the style, coherence, and clarity issues.

Additionally, authors are welcome to be explicit about methodology as it is superficially addressed.

Additional Questions:
1. Originality: Does the paper contain new and significant information adequate to justify publication?: The study
enriches the current knowledge and contributes to emerging research directions and new research patterns.
However, and the theory/ bibliography may be further boosted in certain sections mentioned below particularly in
regards with DT and VHOS. Moreover, authors are encouraged to provide more practical examples of VHOs
from tourism industry.

However, proofreading is needed, as while the study is so interesting, sometimes I have some difficulties to
follow the paper because of the style, coherence, and clarity issues.

For instance, beginning with the abstract

- Authors are encouraged to articulate further why this study so important and what is the research gap or the
counter-claiming that this paper addresses.
- Elaborate more on the link between VHOs and DT and why this study matters.
- In addition, the abstract has some communication and structure issues as it doesn’t represent thoroughly
the core issue of the paper. Revision is needed in the case of abstract as the academic style needs attention

2. Relationship to Literature: Does the paper demonstrate an adequate understanding of the relevant literature
in the field and cite an appropriate range of literature sources? Is any significant work ignored?: Generally, in
terms of smart technologies and tourism, authors should
- provide more concreate examples of VHOs and how this notion is linked with DT.
- Elaborate on the drawbacks/ barriers of the VHOs
- P2: Better Intro on DT and how VHO links to DT
- Page 5: More details about the LR insights and each stream.
- How are the previous pages connected to this period? (lines2- 10, p6)
- These two paragraphs perhaps should be moved to previous pages (page4)

As a result, I, unfortunately, do not feel yet that your paper makes a strong enough contribution in its current
stage of development/

3. Methodology: Is the paper's argument built on an appropriate base of theory, concepts, or other ideas? Has

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the research or equivalent intellectual work on which the paper is based been well designed? Are the methods
employed appropriate?: Generally, in terms of smart technologies and tourism, authors should
- provide more concreate examples of VHOs and how this notion is linked with DT.
- Elaborate on the drawbacks/ barriers of the VHOs
- P2: Better Intro on DT and how VHO links to DT
- Page 5: More details about the LR insights and each stream.
- How are the previous pages connected to this period? (lines2- 10, p6)
- These two paragraphs perhaps should be moved to previous pages (page4)

As a result, I, unfortunately, do not feel yet that your paper makes a strong enough contribution in its current
stage of development/

4. Results: Are results presented clearly and analysed appropriately? Do the conclusions adequately tie
together the other elements of the paper?: The method section and data analysis are very weak. Authors should
elaborate further on
- why exploratory research is needed (Moreover, this section need a better transition sentence_
- why a. quals are selected as method (justify by providing evidence)
- why they did use purposive sample and sampling method
- why semi – interviews selected?
- How about the inclusion Criteria of the sample and the protocol
- How many interviews? Details for the sample size are needed and details if the size is in line with saturation
size sample guidelines

Authors should consider the following questions

-What did the authors triangulate?
- Why are types of triangulation authors deployed according to Creswell?
- More evidence why is that any information on this research method?

5. Practicality and/or Research implications: Does the paper identify clearly any implications for practice and/or
further research? Are these implications consistent with the findings and conclusions of the paper?: There is a
lack of specific managerial implications. The author/authors should narrow down specific suggestions for tailor-
made solutions and mention implications on how companies could exploit this new knowledge in a practical way.

6. Quality of Communication: Does the paper clearly express its case, measured against the technical language
of the field and the expected knowledge of the journal's readership? Has attention been paid to the clarity of
expression and readability, such as sentence structure, jargon use, acronyms, etc.: The text is easy to read, and
it is quite clearly expressed. Nevertheless, the author is encouraged to proofread the whole text paying more
attention to the following points.
Several redundancies, some syntax, syntax errors, problems with the collocation and non-academic style are the
most important problems of this paper. Moreover, some important details to consider when authors proofread the
following pages that are mentioned above.

Authors should revise the titles and avoid using acronyms “ 4.8 CSFs for VHO”

DEADLINE: 04-Mar-2023

To go straight to your paper, click this link: *** PLEASE NOTE: This is a two-step process. After clicking on the
link, you will be directed to a webpage to confirm. ***

https://mc.manuscriptcentral.com/jhti?URL_MASK=1ade83919040454bb2cd2700a6f8fc74

To help support you on your publishing journey we have partnered with Editage, a leading global science
communication platform, to offer expert editorial support including language editing and translation.

If your article has been rejected or revisions have been requested, you may benefit from Editage’s services. For
a full list of services, visit: authorservices.emeraldpublishing.com/

Please note that there is no obligation to use Editage and using this service does not guarantee publication.

4 of 4 04/06/2023, 19:46
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Fajar Putra <[email protected]>

Emerald’s green open access policy and self-archiving instructions

2 messages

9 April 2023 at
Journal of Hospitality and Tourism Insights <[email protected]>
20:53
Reply-To: [email protected]
To: [email protected], [email protected]

09-Apr-2023

Dear Putra, Fajar; LAW, Chun Hung Roberts,

“Critical Success Factors for Virtual Hotel Operator Partnership with Small- and Medium-sized Hotels:
Perspectives of Owners and Operators” - JHTI-06-2022-0244.R5

Congratulations on having your article accepted for publication.

Please find a PDF of your Author Accepted Manuscript (AAM) attached. Please ensure you store this safely, as
you will need it if you want to self-archive your work. This PDF is not a proof of your work; you will be sent a
proof once your article has been typeset.

Please note: The PDF must be opened with Adobe Acrobat Reader. Download the PDF, open Adobe Acrobat
Reader then go to File, select Open, locate the PDF in your Downloads folder and open it.

Next steps

Your article will now go through editorial checks by Emerald’s editorial team to ensure it meets our publication
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Once the licence is completed, your article will enter the production process and you’ll be provided with a proof.
You will need to approve your proof before your article is published.

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Emerald is aware that many authors wish to make their work available in institutional repositories or are
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This means that as soon as your article has been published in the journal on Emerald insight, you may make the
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• Either manually deposit the accepted manuscript attached to this email or a version from your own records
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Or, if applicable, forward your AAM to your institution’s Repository Manager.

To deposit your AAM, you will need to adhere to the following conditions:
• You must include the DOI (10.1108/JHTI-06-2022-0244) of your article;

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• Include all of the relevant metadata (article title, journal name, volume, issue no. etc.).
• Include the date your article was accepted for publication, which was:
(09-Apr-2023)
• The AAM must clearly indicate where the article was published, or where it is forthcoming;
• Include a clear licensing statement (see below).
• Include the article abstract (see below):
This paper identifies the critical success factors (CSFs) of virtual hotel operator (VHO) in using hotel
management system partnerships with small- and medium-sized hotels (SMSHs).
This study uses a qualitative approach, with 25 semi-structured interviews with hotel owners and VHO
management. Thematic analysis is used to determine themes to evaluate hotel owners and operators’
perceptions.
CSFs for VHO partnership with SMSHs include marketing and promotion strategies, client relationships, training
and human resources development, hotel operation management, innovation strategies, capital expenditures,
and property management systems. VHOs also have a symbolic impact on their mutualistic relationship with
SMSHs by increasing service and enhancing product competitiveness and profitability.
Findings are beneficial for VHO in determining the most significant CSFs, thereby establishing additional metrics
in business performance and increasing resilience in the accommodation sector. Further studies can measure
the digital technology factors from VHO, including property management systems and mobile applications.
This study first identifies CSFs for VHO companies from the perspectives of hotel owners and management. This
contribution adds to the literature on CSFs in the context of digital technology implementation in SMSHs.
Moreover, implications are beneficial for VHO management in determining the most significant CSFs for
companies to measure their business performance and increase resilience in the accommodation sector.

Deposit licences
Emerald allows authors to deposit their AAM under the Creative Commons Attribution Non-commercial
International Licence 4.0 (CC BY-NC 4.0). To do this, the deposit must clearly state that the AAM is deposited
under this licence and that any reuse is allowed in accordance with the terms outlined by the licence. To reuse
the AAM for commercial purposes, permission should be sought by contacting [email protected].
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Congratulations once more on having your article accepted and thank you for choosing to publish with Emerald.

Kind Regards,

Laura Wilson
Head of Research Integrity, Rights & Policy, Emerald Publishing

PDF_Proof.PDF
307K

Fajar Putra <[email protected]> 10 April 2023 at 14:07

To: [email protected]

Dear Laura,

Thanks for your email. Will do the checking and inform the editorial team.

Best regards,

Fajar
[Quoted text hidden]

2 of 2 04/06/2023, 19:48
March 19, 2023
Dear Dr. Nikolaos Stylos:
Guest Editor, Journal of Hospitality and Tourism Insights (JHTI)
Special Issue: Marketing via Industry 4.0 smart technologies in hospitality and tourism
Thank you for reviewing our manuscript “Critical success factors for virtual hotel operator
partnership with small and medium-sized hotels: the perspective of owners and operators'” which
was submitted to Special Issue: Marketing via Industry 4.0 smart technologies in hospitality and
tourism, Journal of Hospitality and Tourism Insights (JHTI) for publication consideration. We are
grateful to receive your constructive and valuable comments from two reviewers, which have
helped us to improve the overall quality of our manuscript.
Please note that we have revised the paper based on your comments and suggestions. This revision
summary provides a point-to-point response to the comments offered by the editors.
Again, thank you very much for your interest in this work. We wish the revised manuscript would
meet the standards of the Journal of Hospitality and Tourism Insights (JHTI).

Yours truly,
Fajar Putra
Correspondence author

Reviewer(s)' Comments to Author:

Reviewer 1:

1. Thank you for the opportunity to review your paper. I offer several suggestions for
improvement, which I hope will be helpful to the author(s).

Introduction: VHO – provide a definition, description, and examples in the introduction.

What are VHOs? What is their business model? Provide examples of VHOs and
trends/growth in the number of VHOs. Are VHOs based on the use of smart technology?
How exactly? etc. Make sure that the positioning and explanations offered in the
introduction can position the paper within the smart technology literature.

Our response:

Thank you for your comments. We greatly appreciate your valuable insight and interest in our
article.

VHO is a type of hotel management company that utilizing software that can be used to manage
and operate a hotel. OYO and Reddoorz are two examples of companies that use VHO technology

5
to provide their customers with an efficient, cost-effective way to book rooms and manage their
stay. VHOs accelerate the region's online travel ecosystem and provide solutions for hotel owners
and customers looking for quality and price standardized accommodation (Anandan et al. 2016).
Hotel Smart Technology is a term used to describe the use of technology in hotels to improve
efficiency, reduce costs, and enhance customer experience. This includes technologies such as
virtual hotel operators (VHO) that creating service/product innovations, marketing innovations,
process innovations, and organizational innovations using technology (Wiastuti and
Susilowardhani 2017; Han et al. 2021; Elshaer and Marzouk 2022).

2. Literature review:
Second paragraph – more explicitly explain the two models you mention (management and
franchise). Be direct (don’t use former and latter). The paragraph reads convoluted now.
As before, provide examples for each model, so it is clear to the reader what you are talking
about. Section 2.3 Critical Success Factors (CSFs) influencing joint ventures in hospitality
business – this section is confusing. Are VHOs joint ventures? From the little explanation
you provide about VHOs, they don’t seem to be based on a joint venture model. However,
if they are, then you have to be explicit about it, and explain the model their follow. How
is the JV literature relevant? If VHO are not using JV (or if this is not your primary concern
for your paper), then this section should be deleted (along with other mentions of JV
throughout the paper). You mention within this section strategic alliances. While strategic
alliances share characteristics with JV, they are not JV. Altogether I struggled to identify
how this section adds value. What is the theoretical perspective within which you position
your study? You talk about critical success factors, but what theory is behind them? You
should include a theoretical discussion."

Our response:

We thank you for your constructive feedback. Please note that we have revised the manuscript
based on your comments. We look forward to your positive response.

2.2 Critical Success Factors (CSFs) influencing joint ventures in hospitality business
Companies increasingly focusing on geographical diversification implies a decision-making
process on approaching the opening of new markets and how to best penetrate them. International
Joint Ventures (IJV) are one of the most common forms of market entry used by companies for
their internationalisation processes: IJVs allow them to connect with a local partner and leverage
its resources for successful entry. Because the high failure rate of relationships between companies
is often due to an inappropriate choice of partner coupled by the lack of proper due diligence and
other potentials for relationship problems, partner selection is a primary factor in achieving success
in establishing a joint venture (JV). When creating an IJV, values such as trust, commitment, and
congruent goals are highlighted as important factors in the relationship and are essential for its
success (e Silva and Oliveira 2017). The similarity in the corporate values and missions of both
partners has become a major impetus in the development of a competitive service strategy. This
congruence is supported by building mutual trust, the synergetic effects of the use of resources,
strong financial background and equity sharing, information exchange and knowledge sharing with
the local partner, efficiency in strategic and marketing planning, experience in market research
activities, and exceeding customers’ expectations and needs, all of which are critical to the success
of these alliances (Li et al. 2006; Magnini 2008; Lee et al. 2013).
Cooperation between hotel business and affiliation with a chain hotel brand create associations
in customers through several strategies such as assessing customer reviews, contacting the target
market, offering benefits to members, and offering a corporate contract/rate for groups or
5
companies (Resende et al. 2018). Negotiating and operating managed hotels are complex processes
where the owner and operator must reach an agreement on various issues. It is critical that all
parties involved understand not only the agreement itself, but also the other partner's perception of
it (van Ginneken et al. 2019). For Contractor and Kundu (1998) several critical factors need to be
consider when choosing and international hotel alliances, namely economies of scale, the firm’s
ability to exercise management control and maintain quality, the need for size in global operation,
reservation system, and investment in training.
Industry challenges include competitive pricing, better marketing and promotion methods,
improved quality of the facilities, improved service delivery, customer service by maintaining
good customer relationships, improving the quality and variety of the products offered (i.e.,
cleanliness, technology, facilities) and loyalty schemes used to retain customers (Ahmad and Arif
2016). Inter-relationship among hotel management companies and hotel owners should be based
on cooperative relationships to overcome these limitations. Hence, the business strategy conducted
by SMSHs owners is an essential part of facing and several factors should be considered and
undertaken. This includes strengthening the market position of small hotel businesses through
various strategies such as branding, product comparison, service technology, and themes which
contribute to the overall image-building of a small hotel business. Factors associated image
building include, among others, hotel design, management philosophy, commitment to quality and
consistency in service delivery, and use of smart technology innovation for increased
competitiveness and business performance (Fredrick 2019; Lee and Lee 2020; Nunkoo et al. 2020;
Dieguez et al. 2022).

3. Methodology: Is your focus on the small hotel owners? Or the VHO? Or both? In the
methodology, you say “Exploratory research is therefore needed to understand the hotels'
owners' perspectives on their partnerships with VHO to identify the CSFs for VHO”.
However, later on you talk about the recruitment of VHO management. It is not clear where
the focus is. You should be more specific. Your context – Indonesia – needs to be properly
introduced and explained. What is interesting / unique about the context and VHO? When
describing the sample, please indicate how many different VHOs were represented, and if
possible characteristics of those VHOs.

Our response:

Thank you for your comments. Please note that we have revised the manuscript based on your
comments. Hence, we have accordingly provided more detailed information in the section
discussing the study’s methodology. Please if the full manuscript’s revised version satisfies your
comments.

Exploratory research is therefore needed to understand both hotels' owners' perspectives and VHOs
management on their partnerships to identify the CSFs for VHO.

All of the participants' identities in this study remain anonymous. Sixteen participants represented
four VHO companies that operated in Indonesia namely Airy Rooms, OYO rooms, Reddoorz, and
Zen Rooms. Those VHOs companies represent one of the most rapidly expanding types of
hospitality management in Asia, where enormous numbers of SMSHs operate. Its core idea is to
transform SMSHs and ensure customers' safety and comfort by unifying them under their brand
name.

5
 4. Results and Discussion: you say that “Client relationship received the highest weight
among the partnership factors”. How did you measure the weight? Again, this is a
qualitative study. If you make a claim like this, you should be able to justify it (or
alternatively, please modify the wording). In section 4.2. marketing factors, you talk about
marketing and promotion strategies. However, promotion is part of marketing. So are all
the other factors you mention such as market segmentation, pricing strategy, branding and
distribution channel. Please modify the wording to reflect the fact that all those (including
promotion) fall under the umbrella of marketing. You discuss 7 different success factors.
Please graphically represent the relationships among those factors. How are they linked to
each other? Do they reinforce each other? Crucially, how is technology related to the rest
of the factors?

Our response:

We thank you for your constructive feedback. Please note we have revised the manuscript based
on your comments. We look forward to your positive response.

We modify the wording into

Client relationship is the most critical factors in the success of a Virtual Hotel Operators.

From the result of the interviews, frequently mentioned factors by VHO management and hotel
owners include marketing strategies, followed by market segmentation, pricing strategy, branding,
promotion and distribution channel.

The relations and full explanation presented in Table 2. Critical Success Factors for VHO
partnerships with SMSHs

5. Conclusion: The theoretical implications section needs to be elaborated and expanded.

Make sure to explicitly identify your theoretical contributions in light of the smart
technology focus of the SI.

Our response:

Thank you for your comments and we are grateful for your constructive feedback.

Smart innovation for hotels is the use of cutting-edge technologies to improve efficiency, reduce
costs, and enhance customer experience. This includes technologies such as virtual hotel operators
(VHO), automated check-in/check-out systems, digital keyless entry systems, artificial
intelligence (AI) chatbots, and more. By leveraging these technologies, hotels can provide a better
overall experience for their guests while also increasing operational efficiency.

6. Other issues: The paper needs to be reviewed by a professional copywriter for flow and
grammar.

Our response:
We thank you for your constructive feedback. Please note we have revised the manuscript based
on your comments. We have proofread the paper and reorganized the articles following your
suggestions. We look forward to your positive response. We have proofread the paper.
5
Reviewer 2:

1. The study enriches the current knowledge and contributes to emerging research directions
and new research patterns. However, and the theory/ bibliography may be further boosted
in certain sections mentioned below particularly in regards with DT and VHOS. Moreover,
authors are encouraged to provide more practical examples of VHOs from tourism industry.
However, proofreading is needed, as while the study is so interesting, sometimes I have
some difficulties following the paper because of the style, coherence, and clarity issues.
Additionally, authors are welcome to be explicit about methodology as it is superficially
addressed.

Our response:

We thank you for your constructive feedback. Please note we have revised the manuscript based
on your comments. We have proofread the paper.

2. Abstract: Authors are encouraged to articulate further why this study so important and what
is the research gap or the counter-claiming that this paper addresses. Elaborate more on the
link between VHOs and DT and why this study matters. In addition, the abstract has some
communication and structure issues as it doesn’t represent thoroughly the core issue of the
paper. Revision is needed in the case of abstract as the academic style needs attention.

Our response:

We thank you for your constructive feedback. Please note we have revised the manuscript based
on your comments.

- This study pioneeringly identifies the CSFs for VHO companies from the perspectives of
hotel owners and management. This contribution adds to the literature on CSFs in the
context of digital technology implementation in SMSHs. Moreover, its implications are
helpful for VHO management in finding the most significant CSFs for companies to
measure their business performance and increase resilience in the accommodation sector.

3. Relationship to Literature: Does the paper demonstrate an adequate understanding of the

relevant literature in the field and cite an appropriate range of literature sources? Is any
significant work ignored:
-Generally, in terms of smart technologies and tourism, authors should provide more
concreate examples of VHOs and how this notion is linked with DT.
- Elaborate on the drawbacks/ barriers of the VHOs
- P2: Better Intro on DT and how VHO links to DT
- Page 5: More details about the LR insights and each stream.
- How are the previous pages connected to this period? (lines2- 10, p6)
- These two paragraphs perhaps should be moved to previous pages (page4)

As a result, I, unfortunately, do not feel yet that your paper makes a strong enough
contribution in its current stage of development.
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Our response:

We thank you for your constructive feedback. Please note we have revised the manuscript based
on your comments.

- VHO management system includes various hotel management developments such as

technology adoption, staff training, standard operation, interior design, room decoration,
standardized furniture, marketing strategies, promotional materials, and customer service
through their customer and hotel owners' mobile applications.

- Although VHO offers various advantages in technology along with the standardization of
hotel management, VHO remains in its development stage. Therefore, the identification of
their critical success factors is crucial.

- the final process involves hotel properties going live on VHO websites, mobile applications,
and other distribution channels. After the transformation, the operational team maintains
the standard and trains the hotel employees to use the property management system and
daily hotel operations.

- Essentially, the study's literature review reveals three CSFs for hotels. The first is human
and technical aspects, level of service quality, financial performance and marketing
(Brotherton and Shaw 1996; Avcikurt et al. 2011; Yadegaridehkordi et al. 2018). Second
is customer relationship management (CRM), information and technology, knowledge
management capability, customer orientation and organizational readiness (Arasli 2012;
Padilla-Meléndez and Garrido-Moreno 2014). Third is the physical environment, including
the hotel's interior and exterior, which leads to customer satisfaction (Yadegaridehkordi et
al. 2018).

- Progress and opportunities abound when exploring CSFs in the hotel. A study by Avcikurt
et al. (2011) described hotel managers' and owners' perceptions of hotel operations' success
related to Internet use, service quality, financial performance, and marketing. Technical
aspects related to Internet usage were among the main factors related to CSFs in small
hotels. Yadegaridehkordi et al. (2018) also proposed four aspects that influence the
performance and growth of small hotels: first, the organizational aspect includes top
management support and financial performance. Second, human resources include
employee preparation, education, service standardization, quality, and customer
satisfaction. Third is the environmental atmosphere, including hygiene and cleanliness,
interior and exterior architecture, and location. Fourth is information and technology,
encompassing the firms' external and internal technologies and benchmarking with process
and equipment standardization.

- We have moved two paragraphs as suggested to page 4.

4. Methodology: Is the paper's argument built on an appropriate base of theory, concepts, or

other ideas? Has the research or equivalent intellectual work on which the paper is based
been well designed? Are the methods employed appropriate:

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 - The method section and data analysis are very weak. Authors should elaborate further on
why exploratory research is needed (Moreover, this section need a better transition
sentence)
- why a. quals are selected as method (justify by providing evidence)
- why they did use purposive sample and sampling method
- why semi – interviews selected?
- How about the inclusion Criteria of the sample and the protocol
- How many interviews? Details for the sample size are needed and details if the size is in
line with saturation size sample guidelines

Authors should consider the following questions

- What did the authors triangulate?
- Why are types of triangulation authors deployed according to Creswell?
- More evidence why is that any information on this research method?

Our response:

We thank you for your constructive feedback. Please note we have revised the manuscript based
on your comments.

- Exploratory research is needed to understand both hotels' owners' perspectives and VHOs'
management on their partnerships to identify the CSFs for VHO.

- Qualitative approaches is a "well-established approach to researching phenomena in the

social sciences, and its emphasis is on empathetic understanding, especially regarding the
'how' and 'why' of tourism-related phenomena and experiences" (Dwyer et al. 2012, P.312).

- Purposive sampling was used to select relevant participants able to answer specific research
purposes (Patton 2014). Because the study focuses on developing VHOs in Indonesia, the
sampling focused on key participants from Indonesian VHO management and hotel owners.
Participants were recruited via different procedures prior to the fieldwork process. First,
VHO management was invited based on the company's affiliation accounts on the social
network platform LinkedIn; the platform "connects professionals in various fields and,
therefore, provides greater ability to target data collection to an appropriate social network"
(Dusek et al. 2015, P.282).

- Semi-structured interviews with open-ended questions were employed to meet the research
objectives. Altinay et al. (2015) explained that these interviews enable participants to
explain their point of view, seek new perspectives, find general trends and understand the
relationships of variables in research.

- The interviews focused on the participants' experiences, VHO goals and characteristics,
and the critical factors for VHO success from management and hotel owners. Sixteen
participants represented four VHO companies that operated in Indonesia: Airy Rooms,
OYO rooms, Reddoorz, and Zen Rooms. Those VHOs companies represent one of Asia's
most rapidly expanding types of hospitality management, where enormous numbers of
SMSHs operate. Its core idea is to transform SMSHs and ensure customers' safety and

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 comfort by unifying them under their brand name. While nine represented hotel owners
(Table 1). Respondents' job descriptions in VHO are connected to hotel operations,
business development, transformation, marketing, and human resources.

- VHO Participants' experience ranged from four to 18 years of working experience in

various fields (e.g., hotels, resorts, cruise ships or restaurants). Specialties varied from
hospitality backgrounds such as hotel operations, e-commerce, customer services, revenue
management, sales and marketing, event management, pre-opening, and procurement. In
contrast, six other managers came from non-hospitality backgrounds, such as banking,
insurance, consumer goods, retail/sales, and human resources. Nine hotel owners were
interviewed. Hotel owners' educational backgrounds were unrelated to hospitality, with
backgrounds in management, economics, IT, and psychology. Most hotel owners were
inexperienced in the hospitality industry: their experiences and specialties were remarkably
diverse. For example, some were wedding organizers, caterers, social entrepreneurs,
salespersons, and contractors. Only one participant had experience in managing their
family's hotel business. The accommodation types ranged from the homestay, guest houses,
and one to three-star hotels. The partnership agreement between hotel owners and VHOs
lasted one to five years. The diversity of the participants in this study ultimately helped the
comprehensiveness and diversity of information from the participants' perspectives.

- First is triangulation data from multiple sources of participants in the interviews. In this
study, interviews were conducted with two groups of participants, namely hotel owners
and VHO management. Secondary data reports, online travel trends, hotel statistics, and
articles on VHOs used to complete the analysis for this study. Hence, the study's validity
and reliability were based on data sources.

5. Practicality and/or Research implications: Does the paper identify clearly any
implications for practice and/or further research? Are these implications consistent with
the findings and conclusions of the paper: There is a lack of specific managerial
implications. The author/authors should narrow down specific suggestions for tailor-
made solutions and mention implications on how companies could exploit this new
knowledge in a practical way.

Our response:

We thank you for your constructive feedback. Please note we have revised the manuscript based
on your comments.

- For hotel owners, a virtual hotel business can be used as a solution for service quality and
marketing and promotion strategy in the current digital era. Moreover, hotel operators can
determine CSFs from the owners' interests (i.e., providing expertise in the marketing
process and promotion strategy and implementing standards and training for hotel
operations by prioritizing aspects of digital technology). Hotel management should allocate
a budget for information systems and update their technology on their daily operations
while maintaining the data management process. Findings will help VHO management
determine the most significant CSFs to achieve their goals, measure performance, and
expand their business networks. Additionally, this study will help inform the government
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 to create policies on how SMSHs can be transformed into standardized accommodations.
In return, it will support local tourism, especially in developing countries such as Indonesia,
India, the Philippines, and Vietnam. Most accommodations are in SMSHs categories.

6. Quality of Communication: Does the paper clearly express its case, measured against the
technical language of the field and the expected knowledge of the journal's readership? Has
attention been paid to the clarity of expression and readability, such as sentence structure,
jargon use, acronyms, etc.: The text is easy to read, and it is quite clearly expressed?
Nevertheless, the author is encouraged to proofread the whole text paying more attention
to the following points. Several redundancies, some syntax, syntax errors, problems with
the collocation and nonacademic style are the most important problems of this paper.
Moreover, some important details to consider when authors proofread the following pages
that are mentioned above.

Authors should revise the titles and avoid using acronyms “4.8 CSFs for VHO”

Our response:

We thank you for your constructive feedback We have proofread the manuscript.

- We have revised the sub section 4.8 into: 4.8 Critical Success Factors for Virtual Hotel
Operators