Hotel outsourcing under asset specificity: “The good, the bad and the ugly”

•Three case studies investigating the performance of Tunisian hotel outsourcing.•We apply TCE to examine hotel outsourcing relationships under asset specificity.•Working within post-positivism, we find evidence of falsification value.•Insights have important implications for the management of hotel outsourcing.

This paper presents three case studies developed to investigate outsourcing outcomes in the Tunisian hotel industry. The paper applies a transaction cost economics (TCE) logic to examine potential contracting problems stemming from hotel outsourcing under asset specificity conditions. Working within the tradition of post-positivism, we find case study evidence of significant falsification value regarding TCE propositions on the performance consequences of unilateral and bilateral relation-specific investments and their holdup potential. Our insights have important practical implications for the management of hotel outsourcing relationships characterized by high asset specificity.