Competitive actions and firm performance of hotels in Hong Kong

Drawn on the recent action-reaction perspective in competitive dynamics studies, this paper suggests that not only the number of competitive actions, but also the extent of differences of action portfolios within and between firms are relevant in determining a firm's performance. A distinction of these differences of competitive action portfolios among firms and the corresponding measures to capture these effects are proposed. This study of Hong Kong high tariff hotels confirmed that diversifying a hotel's portfolio of actions, but not too much different from the competitors, would help hotels to achieve higher financial performance in a competitive market.