Final Research Paper-BP-INTS

Running Head: Financial Impacts of Fracking & the Hotel Industry

The Financial Impacts of Fracking & the Hotel Industry

Brenda Perez

INTS 3300-001

Dr. Gail Bentley

Texas Tech University


Abstract

The purpose of this research paper is to create new insights and produce ideas for future

efforts and for further studies as well as create a reasonable and general perspective in terms of

understating the overarching question about the impact of fracking on families and communities.

The incorporation and integration of the Restaurant Hotel Institutional Management and the

Organizational Leadership disciplines made this all possible in discovering the financial effects

of hotels and the general understanding between wages and fracking. The assimilation of peer

reviewed articles made the foundation of this research paper. The method of analysis that was

used in every peer reviewed article and the research paper was the quantitative research strategy.

The conclusions to the research paper stands that in a booming oil community the financial

impacts that fracking has on hotels is abundant and they are very diverse in different situations,

but nevertheless impacting the economy in one way or another regardless if its positive or

negative. Another conclusion that was found would be that there are ways to get residents from a

booming oil community to stay employed in the hotel industry rather than working for a fracking

company that pays higher wages.


The purpose of this research paper is to create insights into the all-encompassing question

about the impact of fracking on families and communities using an interdisciplinary research

process and Repko’s 10 STEP process. Since the research question is to broad to be satisfactorily

resolved from one single discipline there will be two disciplines that will provide the greatest

amount or research and information to the overarching question and they are the Restaurant

Hotel Institutional Management and Organizational Leadership disciplines. The focus question

of the research paper is, what are the financial impacts that fracking has on hotels and how will

people in a booming oil community continue to work for lower wages rather than getting hired

on to an oilrig?

Step 1: State the Focus of Your Paper

Petroleum engineers have used hydraulic fracturing as a means of increasing well

production since the late 1940s. Fractures can also exist naturally in formations, and this process

can widen both natural and man-made fractures. As a result, more oil and gas can be extracted

from a given area of land. Since there has been a recent growth in activity related to this method

of extraction, there has also been a great deal of debate about the opportunities and challenges

associated with this process. This is a complex issue and many fields of study provide a different

perspective on the various aspects. With the integration of the Restaurant Hotel Institutional

Management and Organizational Leadership disciplines a very complex question will be

discussed. The complex problem is, what are the financial impacts that fracking has on hotels

and how will people in a booming oil community continue to work for lower wages rather than

getting hired on to an oilrig?


STEP 2: Justify Using an Interdisciplinary Approach

There are many reasons why a community or a family would approve or disapprove of

hydraulic fracturing being done in their area of living. In order to have the best response and the

most informed answer would be by looking at the question through multiple perspectives since

this would be considered a complex question and is very controversial. No single discipline has

been able to or will be able to answer the complex problem sufficiently or lengthily. The

opportunities and challenges that a community has to pursue and overcome would be best looked

at through a business perspective and how the economy in that community would change as well

as how the leadership be conducted. Lastly, the hotel management approach to the situation,

which is how to keep family members, or residents of a community working for lower pay in a

hotel industry.

Step 3: Identify Relevant Disciplines

There were numerous of potential disciplines that could have been used to solve the

wicked problem, but to have a comprehensive answer only the most relevant disciplines must be

expended. There were three very applicable disciplines that were very debatable in which were

the most useful and they were the Restaurant Hotel Institutional Management discipline, the

Organizational Leadership discipline, and the Media Strategies discipline. All three disciplines

provided a great and general perspective in terms of understating the overarching question about

the impact of fracking on families and communities. The RHIM discipline went into answering

questions like, what is the financial impact on the community and the rising opportunities for

businesses? The Organizational Leadership disciplines answered questions like, what is the role

of the leaders of the community to ensure the health and well being of families in a community


where fracking is used to increase oil and natural gas production? Lastly, the Media Strategies

discipline answered questions that could solve the wicked problem by understanding and

exploring, what effect does media and all its forms have on the public opinion of opportunities

and challenges associated with the practice of hydraulic fracturing. After considering all of the

disciplines the two that made more sense and would provide a larger framework of information

were the Restaurant and Hotel Management and the Organizational Leadership disciplines. The

reason for this is because these two disciplines have produced a greater body of research and

provide greater insights into the wicked problem.

Step 4: Conduct a Literature Search

Since the research question is too broad to be satisfactorily resolved from one single

discipline, the incorporation of two disciplines of study is essential. The RHIM and

Organizational Leadership disciplines will be the areas of study that will draw up the most

insights and scholarly literature. Also, the integration of all the information and current

knowledge about both will build up a more complete and broad understanding of the focus

question which is, what are the financial impacts that fracking has on hotels and how will people

in a booming oil community continue to work for lower wages rather than getting hired on to an

oilrig?

The first discipline, which is the Restaurant Hotel Institutional Management is useful to

the paper and provides the greatest perception because this discipline is connected to keywords

like community, hotels, hospitality industry, revenue, wages, and families which has everything

to do with answering a large part of the research question. Ritchie, Crotts, Zehrer, & Volsky

(2014) noted that the tourism industry is one of the largest and most successful in the world and


it is greatly affected by a number of outside businesses. With that being said and evaluating what

those authors had to say it is clear to state that fracking will most definitely affect hotels business

within that community. Nicolaides (2006) also states that a having a good and productive

relationship between a manager/hotel business and employee is non-negotiable one especially in

a period where employees are desperately seeking self-development and higher paying jobs.

Employees want managers/hotel business that can lead by example and are able to comprehend

and realize their desires and associate the needs of the hotel business to their ideals and morals

while developing their skills in a workable environment with out dangers. This hospitality

industry insight is very important information for developing a complete answer to the focus

question.

The second and last discipline is Organizational Leadership and it is correspondingly

important into getting a more general and informed solution. The reason Organizational

Leadership is so important is because this is such a broad field and there are multiple views and

sources to get the right information from economics to general business insights. Paredes,

Komarek, & Loveridge (2015) found that new machineries combining hydraulic fracturing and

parallel drilling in oil and gas removal are creating a rapid growth of production. Citizens of

places where underground oil and gas residues are discovered want to know about the larger

financial, social, and environmental impressions of these undertakings that generate premium

income for some citizens. These authors also formulated that with some concepts on how areas

might use policies that could allow gas extraction to move frontward it might benefit property-

owners, as well as trying to establish some economic precautions for the broader community,

would be useful and could possibly also benefit other businesses around it. This article which is

associated with the disciplinary affiliation, Organization Leadership which was found during


conducting the literature search proves how this area of study is providing great information and

perspectives that will help this research paper overall.

Step 5: Develop Adequacy in Each Relevant Discipline

Adequacy will be developed from the Restaurant Hotel Institutional Management and

Organizational Leadership disciplines, which will be discussed in detail. Developing adequacy in

each discipline is crucial in formulating a definite solution to the question about what are the

financial impacts that “fracking” has on hotels and how will people in a booming oil community

continue to work for lower wages than on an oilrig.

For the Restaurant and Hotel Institutional Management discipline the primary theories

and methods of research used were the core tourism theory and foundational tourism theory.

There is not a clearly stated guide that lets researches know which theories to use but those were

the main ones that were utilized. The Restaurant Hotel Institutional Management discipline is

interchangeable with the Tourism discipline and this field you can never just use one specific

theory or look at one way to make decisions. The methods of research used in this discipline are

mainly statistical analysis, surveys, and classification. Also, this discipline is mostly quantitative

research based because of all of the numerical data that is produced and what researchers base

their findings on. Furthermore, in James (2011) there was a specific phenomenon that was

discussed and asked the question, what are peak oil’s looming dramatic effects on the source of

energy and the consequence for civilization and tourism? This problem is very relatable to the

focus question of this research paper and peer review articles like this prove to be very useful

and provide great insights to this focus question.


For the Organizational Leadership discipline the primary theories and methods of

research used were grounded theory and systems theory. Grounded theory is a general method of

research and was incorporated in this discipline using quantitative research strategy methods.

Systems theory also uses the quantitative research method strategy and has provided a great

connection in Twomey & Farias (2014) article between the phenomena that was studied there

and the current focus question. The phenomena of that article was, the need to uncover business

practices, as demonstrated in “fracking” operations, discourage motivation, harmfully impact the

economy and the human wellbeing of citizens, and damage the environment. Fracking literally

blasts the foundation of the earth, and figuratively blasts the foundation of business. That article

provided a very relatable phenomenon to the current focus question. Also, the main methods of

research used in this particular study were mainly statistical analysis, surveys, and

categorization.

Step 6: Analyze the Problem and Evaluate Each Insight or Theory

The literature of each discipline is very important because the information that comes

from each source will help in answering and giving a complete understanding of the research

question. The Restaurant Hotel Institutional Management and Organizational Leadership are the

main disciplines that will help in understanding how different situations like fracking affect

business.

Restaurant Hotel Institutional Management

Ritchie, Crotts, Zeherer, & Volsky (2014) found that the lodging industry had a lot of

negative effects from the many disasters and downturns in America. They collected data and

based their data from a little more than 13,000,000 hotel rooms and over 50,000 rental properties


to measure and compare the financial impact of the disastrous oil spill that occurred in 2010 in

America. The results found that regions that were affected from the oil spill had a lower demand

for lodging facilities and the regions that were not affected had an increase. This particular study

also identified that the use of secondary data can be financially better option to look and compare

different hotels in different regions and compare profits and losses. The information that was

produced is very useful in understanding that disasters caused by oil, will cause the demand for

hotels to go down to some degree and in particular hotels will struggle to continue to be

profitable. The oil problem that had to be resolved brought in people from all over the world for

set period of time and the tourism and travel industry had most of it profit from that and not

much of anything else. The phenomena that will influence this study are how some geographic

regions and sectors of the lodging industry will not profit from an oil crisis or disaster.

James (2011) identifies that when the world has expended half its accessible oil the crude

oil comes to be called peak oil. The diminishing manufacturing levels of oil are leading to scarce

resources and have begun to show the effects like high prices and the changing of human

activities as well as affecting the travel and tourism industry dramatically. James (2011) also

goes on to state that the tourism industry is one of the biggest in the world. With high oil prices

in a community the prices on hotels must also increase and that does not always mean more

profit. The dangers of increasing rates go hand in hand with a declining clientele looking for

lower rates. Peak oil should not be taken lightly and a community needs to understand that a new

mindset should be developing. The decline of oil production will cause the price of oil to raise

therefore hurting transportation, and the entire tourism business. Since tourism is often treated as

an amenity it will not be a main concern in oil distribution. Therefore, causing hotels to lose

money and therefore affecting the community negatively. James (2011) also points out society


and the tourism industry need to be less dependent on oil so that communities all around won’t

fall into a recession.

Organizational Leadership

Mohanty, Nandha, Habis, & Juhabi (2014) examined the oil price shocks which matter

because they disturb spending by customers and businesses on certain key elements as well as

how they affect the United States Travel and Leisure industry and the financial aspects of things.

They found that oil price shocks and the tourism and travel industry are greatly dependent on one

another. The World Travel and Tourism Council also measure the travel and tourism industry as

the net user of oil. The method used in the study was the Fama-French model and the combining

of new data and figures into individual subsectors. The subsectors that were analyzed and

compared were airlines, hotels, entertaining service industries, and restaurants and bars. The

results vary across the subsectors but there was clear evidence in the correlation of oil price and

the travel and tourism industry. This study is extremely important in regards to the hotel sector

because it shows the impact that oil prices have on the industry financially. Most importantly it

gives regulators and corporate executives the information to find better and improved solutions

such as keeping the oil prices down for more profit and the well being of others.

Twomey & Farias (2014) noted that Fracking has been promoted by the government and

is continually funded without much acknowledgement of the dangers. The academic journal

points out how the oil and gas industry has destabilized the free market and the democratic

values of America’s well-being. There are also many laws that are in favor of the gas companies.

The article also goes out to justify the fact that oil and gas companies’ regulations are

insufficient, lack validity, and there is not a suitable protection system in place for the people

who are affected. Fracking also disrupts many different types of businesses by the potential


capability to contaminate the water they rely on. There is proof that fracking generates

employment to communities, but it also goes out to point out that casualty rate and the dangers it

bring to families. The United States of America has values and the core of business if much a

part of its success. Looking for alternative solutions will benefit the people of this country as

well as the future of the world. Fracking is simply a major risk to businesses and the overall

environment.

Step 7: Identify Conflict Between Insights and Their Sources

Identifying conflict between insights and their sources is very important because those

conflicts stand in the way of forming common ground and therefore achieving integration, which

is the main purpose of the entire research document. The first conflict that occurred in the

literature that was used to solve the problem about what are the financial impacts that fracking

has on hotels and how will people in a booming oil community continue to work for lower wages

rather than getting hired on to an oilrig were conflicting insight produced by authors from same

discipline. Some of the literature that was used created great conflict because even though some

of the information was coming from the same discipline, the information from each author that

was going to be used clearly opposed and had different insights. The second conflict that was

found was assumptions between insights. In the Organization Leadership discipline, ontological,

which is about the nature of actuality, is problematic because there is so much information

regarding fracking on the assumption of how it is good as well as how it is bad in small and in

big cities. Lastly, theories are also a source of conflict because in a single piece of literature there

was multiple theories for one discipline and it was very hard to understand the explanations of all


of them. In the Restaurant Hotel Institutional Management discipline this was certainly

problematic because in Mohanty, Nandha, Habis, & Juhabi (2014) the main theory was the

Fama-French model but it conflicted with the other theories that were also mentioned like the

two-factor model, the multifactor model, and the SUR model. Overlooking and ignoring one or

more applicable theories could likely bias the research and produce an incomplete solution to the

problem.

Step 8: Creating Common Ground

The conflicts that were recognized in step 7 were conflicting insight produced by authors

from same discipline, assumptions between insights, and theories. Creating common ground is a

necessary objective and is a portion of the process of integration. Also, forming common ground

is needed to communicate across disciplines.

The first conflict, which is conflicting insights produced by authors from the same

discipline, should first create common ground by organizing and clarifying how some

phenomena’s interrelate and identifying the commonality between some of the different ideas

that were presented. In the Restaurant Hotel Institutional Management discipline there were

articles that were against fracking in communities and there were some that were very supportive

of fracking in city limits. To create common ground a modified map of the casual relations

would have to be made again to make sure nothing was overlooked.

The second conflict, which is assumptions between insights, should create common

ground by using the technique of extension and transformation. Starting with extension,

uncovering a commonality that both shares in how it is a positive and negative thing to have


fracking in communities must be done. The technique of transformation in the assumptions about

the good and bad on the subject of fracking can be resolved by modifying the assumptions. The

resolution is to alter them by placing them on contrasting ends therefore making it possible to

discover the positives and negatives of fracking and understand both sides better.

Lastly, the third conflict, which is theories, can be resolved using the technique

transformation. Creating common ground using transformation involves altering conflicting

theoretic assumptions. Looking at all of the theories and finding the commonality in them and

understanding how they all have a role in the literature would be how creating common ground is

supported.

Step 9: Construct a More Comprehensive Understanding

Since the research question is too broad to be satisfactorily resolved from one single

discipline the incorporation of two disciplines of study was an unquestionably must. The

Restaurant Hotel Institutional Management and Organization Leadership disciplines were the

areas of study that provided all of the information capable of proposing a new insight to the

wicked problem concerning fracking. The focus question of the entire research paper explores

what are the financial impacts that fracking has on hotels and how will people in a booming oil

community continue to work for lower wages rather than getting hired on to an oilrig.

The Restaurant Hotel Institutional Management discipline contributed immensely to the

proposal of the focus question. This discipline generated information about the pros and cons of

working at a hotel rather than a dangerous occupation and benefits of working in a hotel in the

long run. Nicolaides (2006) gives numerous reasons of why working in the hotel industry will be

more beneficial to the overall employee and the benefits that will be reflected on to the


community. One of the motivations for working in the hotel industry in a booming oil

community is the safe environment and workplace that accompanies that decision. As well as the

establishing of short and long term goals in regards to job security. In correspondence to job

security the opportunity for advancement is much vaster. As well as empowering employees and

helping them to succeed in developing their human skills, decision-making, and logical skills.

Motivating and encouraging citizens in a booming oil community to continue their advancing

careers in the hotel industry will benefit the community and the economy and their over all

safety.

The integration of both disciplines is very important, but from the Organizational

Leadership discipline comes some great insights. Ottenbacher, Harrington, & Parsa (2009)

discuss how hospitality is one of the oldest occupations and is deemed as one of the most

powerful economic activities in the world that associates itself with many aspects of human life.

The financial impacts that fracking has on businesses in a community are noteworthy. Fracking

has moments where it flushes in financial greatness into the economy which overall helps most

businesses in a community including the hotel businesses, but the dangers and number of deaths

associated with such industry can be made not worth while to a community. Twomey & Farias

(2014) definitely noted that fracking disrupts many businesses by potentially contaminating

water and compromising a community’s economic success if the oil was to un-expectantly

diminish without any other type of consolidation. Looking for alternative solutions to generate

revenue into an economy other than oilrigs is something that would be very beneficial to the

future of that community and the world.


STEP 10: Communicating the Results

The conclusion of the overall complex research problem has become clearer and there is

now a better understanding of the question at hand. With the incorporation and integration of

both my disciplines I have came up with a conclusion for the study. The focus question has now

been critiqued and examined for the proposal of new ideas and future efforts to have a better

understanding at what is at stake and what could possibly be a solution for future complications

in this area. The focus question was, what are the financial impacts that fracking has on hotels

and how will people in a booming oil community continue to work for lower wages rather than

getting hired on to an oilrig? The first part of the focus question talks about the financial impacts

that fracking has hotels and with all of the research I have concluded that the financial impacts

are very diverse in different situations. In a booming oil community when every thing is going

according to plan and there are no incidents there will be an increase in money going into that

community and the economy because they get paid high wages for the dangerous work they do.

At the same time good does not last forever meaning that with an industry that hazardous and life

threatening even with all the precautions there will be downfalls and tragedies will occur

resulting in an economic downfall. The depletion of oil in some communities also affects the

overall financial impact that will be distressing the community and affecting all businesses in

that area. If a community had a part of its economic income coming in from the business of

fracking and it somehow stopped because there was no more oil to be extracted, the hotel

business would be hurt directly. The reason for this is because if fracking is one of the great

producers of wealth in an economy and if all of a sudden that wealth stopped the hotel business

would be hurt because money brings in tourist and workers who are employed in the fracking

business. Once that specific oil business down turns the income of families in those community


drops therefore having a parallel effect on hotel business, which is a negative outcome. In

concluding the results the hotel business and financial ties, there is also empirical information

that argues that working in a hotel is more pragmatic and will have better consequences in the

long run compared to working on an oilrig for higher pay. Safety and the well being of the

providers of families it the main reason for working in the hotel industry rather than on an oilrig.

The comfort of being in a workplace where there are more safety guarantees should be an

incentive to work in the safe security of a building. Being employed for a company that offers

less pay should not be a motivation to skip that occupation all together. There has been research

that has found that there are greater benefits in working at a hotel for example, there is a better

opportunity to be promoted and that alone comes with a higher income and a greater sense of

accomplishment. As well as developing oneself and being empowered to delegate and help

others.

Conventionally, people seek to find the jobs with the highest pay and with that incentive

usually comes a high risk, this one that happens to be ones life. I believe that ones life should not

be dictated by not knowing if one is going to alive the next day because of the occupation they

hold especially if they have a family that they are solely providing for. With professional

development and hard work one can achieve a good and justifiable life in the safety of a building

all while continually acquiring new skills that will later in life equal to a higher pay and

canceling out the risks that a fracking position entertains.


References

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Paredes, D., Komarek, T., & Loveridge, S. (2014). Income and employment effects of shale gas

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120. Retrieved March 23, 2015, from Science Direct.

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