Which one is better in term of SEO: a sub-directory or a sub-domain?

Selected answers from the Dumb SEO Questions G+ community.

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  Spiros Gianiotis: I handle a hotel chain with 25> individual website. We want to put them all under our brand name (main domain). Should we make sub-directories within the domain or make each hotel a sub-domain and then redirect the old sites.
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  Ryan Cramer: Moz.com's official answer is to use subdomains in this case ( ;). Historically, subdomains had more value, but that was abused and Google ranks them both about the same (as explained by Matt Cutts ; )
  
  Cutts explains do what's easier for you. If you are using a CMS like wordpress, it may be easier to use the subdomain option, changing the settings in just one location (provided that you don't have any static file references including the current domain ex. href="").  ;That was relative link references to either the current page/file (ex. href="../images/awesomepic.jpg") or the domain  ;(ex. href="/images/awesomepic.jpg")
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  Thomas Koutroukis: Spiro there are countless factors and parameters that play crucial role on such an important decision regarding efficient web architecture and best SEO practice.
  
  Allow me to disagree with MOZ here. Currently my team has started discussions with one of our clients, a world-leading financial institution, on migrating their numerous subsidiary domains and subdomains under the umbrella of the parental brand domain by using sub-directories as you mention.
  
  When the authority of the primary parental website is substantial, the accumulated domain authority and backlink equity can flow far more efficiently to the subdirectories compared to the benefits of affiliate brand linking between different TLD entities. Also there are other significant cross-benefits like preventing future legacy SEO issues or the potential of enhancing CTR on search results since users feel more confident when they see a reknown brand URL compared to a URL of a subdomain etc.
  
  I've encountered more than 4 case studies during the last year of big brands which migrated from subdomains to subdirectories under their main domain and they all saw increased search performance, traffic and rankings.
  
  Hope that helps.
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  Ryan Cramer: Actually, Moz is in agreement  ;on this, Sorry , but I accidentally wrote "subdomains" instead of "subdirectories" due to a stronger focus on Google Spam Director and spokesperson, Matt Cutt's recommendation on ease.
  
  If the individual sites are performing well, I would personally recommend the subdomain structure both for ease as well as maintaining the structure that is working for you.  ;
  
  However, to gain the benefits of a single top level domain to overcome lack of placement/exposure with the smaller domains, I agree whole-heartedly with Mr. Koutroukis's advice to use sub-directories as opposed to subdomains.
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  Spiros Gianiotis: today I participated in the
  Google Webmaster Central office-hours hangout and asked got the following reply
  
  thought you would be interested.
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  Thomas Koutroukis:  ;Thank you for opening that up to Google's hangout Spiro. Once more, the response by Google is very diplomatic and very generic regarding the SEO benefits or implications on such a move isn't it? In fact, I doubt it solved your main questions and concerns. From my point of view,I certainly insist on the opinion I expressed above for many many technical, architectural and SEO reasons. I'd be happy to help further if you need any advice.
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