Journal of Hospitality Financial Management: Volume 6, Issue 1
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Electronic Purses, E-Commerce, and Cash Management in Hospitality Firms
(1998) Sheel, Atul
Spin-offs in the Lodging Industry
(1998) Canina, Linda; Klein, Teri
Many lodging companies now find themselves in a challenging position. They are finding it more difficult to attract capital as the industry's growth begins to stabilize due to the inherent cycles and the onset of supply growth. Companies seeking growth and access to public financing must confront questions regarding the best structure as the marketplace changes. Many hotel companies are hybrid enterprises, functioning as operating companies and heavy investors in real estate. The two sides of the business have different risk and potential growth profiles. Specialization achieved through spin-offs may lead to higher growth, better access to capital markets, and improvements in shareholder value. Other research has found a positive stock price reaction to the announcement of spin-offs for the overall market. This paper analyzes whether the financial market perceives spin-offs in the lodging industry as creating additional value. These results will assist lodging managers as they make decisions concerning the structure of the firm in an attempt to maximize value.
The Relevance of Financial Leverage for Equity Returns of Restaurant Firms - An Empirical Examination
(1998) Sheel, Atul; Wattanasuttiwong, Nattika
Cross-sectional time series regressions were used to examine the relationship between the debt /equity ratios of 37 firms in the restaurant sector and their risk/ size-adjusted common equity returns. Findings reveal a statistically sigtuficant relationship between a restaurant firm's debt / equity ratio and its risk/ size-adjusted common equity returns. The relationship holds true regardless of the January effect, and regardless of the use of real or nominal returns. As such, the findings support the issue of capital structure relevance in the restaurant industry, and are suggestive of a strategic relationship between a restaurant firm's debt use and the growth in its market-to-book value.
Light Debt Users and Heavy Debt Users in the Restaurant Industry: A Discriminant Analysis
(1998) Gu, Zheng
The purpose of this study is to investigate the wide diversity in financing of publicly traded restaurant firms in the United States. Fisher discriminant functions were estimated and firm features differentiating light debt users from heavy debt users were identified and analyzed. The study has found that managerial control is the most important contributor to the diversity in debt use in the restaurant industry. Size and type of operation also explain the diversity. The analysis shows that small full-senice restaurant firms with low managerial ownership tend to use less debt, while large economy/buffet or fast-food restaurant firms under tight managerial control are likely to be heavy debt users.
The Impact of Option Listings: A Study of Casino and Gaming Stocks
(1998) Atkinson, Stanley; Byrd, Anthony; Porter, Gary
This study examines the impact of option listings on the common stock of 21 firms specializing in the casino and gaming industry. Our results show that, on average, there is a significant decrease in price during the five-day window which indudes the announcement of the listing, the listing day, and a two-day period following the listing during which a liquid market is created in the option. However, we also show that stock prices recover subsequent to the listing window and that there is no evidence of a permanent change in stock price resulting from the listing. We find a significant decline in trading volume beginning two days prior to the listing, suggesting that the option market displaces trades of a significant number of shares following the listing. Finally, we find a significant decline in firm-specific risk following the listing, but do not find a change in systematic risk. This result suggests that while the introduction of option trading does not change the relationship between these stocks' returns and market returns, the additional outlet for speculators reduces volatility surrounding firm-specific news, lowering the total risk of these stocks.