Issue 1
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2009-01-01
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Do Institutional Investors Favor Lodging Firms with Greater Brand Equity?
(2009-01-01) Oak, Seonghee; Dalbor, Michael
The purpose of this research is to investigate institutional investment behavior regarding lodging firms and their brand equity. If these investors favor firms with higher brand equity, then this could influence the management of lodging firms to pay closer attention to increasing the brand equity of their firm. Our study showed there is a positive and significant relationship between advertising expenditures and the percentage of lodging stocks owned by institutional investors. There is a highly significant difference in the institutional investor percentage between firms that make advertising expenditures and those that don’t.
The Impact of Exchange Rates On Hotel Occupancy
(2009-01-01) Barrie, Bailey; Flanegin, Frank R; Racic, Stanko; rudd, denis p
In many hospitality and tourism programs students are usually required to take only the most basic finance course. This can leave them drastically under prepared for real world situations. Hospitality and tourism is the world’s single largest industry and probably one of the industries most affected by foreign exchange movements. This exposure to foreign exchange movements is magnified by the discretionary nature of hospitality and tourism spending, making the profitability of hospitality providers very sensitive to changes in the exchange rate. This paper explores the effect, if any, of a change in the dollar value of the following five currencies – UK Pound, Euro, Canadian Dollar, Japanese Yen and Mexican Peso, on the hotel occupancy in 7 major U.S. tourist destinations – Orlando, Los Angeles, Washington DC, New York, Orlando, San Francisco, Miami and Las Vegas. We utilized exchange rate data from Oanda Foreign Exchange website http://www.oanda.com/convert/fxhistory , and Hotel Occupancy data for all destinations other than Las Vegas provided by Smith Travel Research. http://www.smithtravelresearch.com/smithtravelresearch/ Occupancy data for Las Vegas was collected from Las Vegas Visitor Profile site prepared for the Las Vegas Convention and Visitors Authority by GLS Research.
The Impact of International Acquisition Announcements on the Returns of U.S. Lodging Firms
(2009-01-01) Oak, Seonghee; Dalbor, Michael
The existing hospitality literature describes how global diversification in the hotel industry looks for a broader presence regardless of existing global representation. However, the finance literature reports a negative impact from global diversification because of the potentially higher cost of coordinating corporate policies. Moreover, agency problems can increase along with the size of the firm. This study measures the wealth impact of hotel global diversification on bidders at the time of international acquisition announcements. We find significant abnormal positive returns on the day of the announcement. We also find that international acquisitions have lower abnormal returns than domestic acquisitions at the time of the announcement.
Corporate Social Responsibility and Financial Performance: A Snapshot from the Lodging and Gaming Industries
(2009-01-01) Jackson, Leonard A.; Hua, Nan
This study examines the relationship between corporate social responsibility (CSR) and financial performance for a sample of lodging and gaming companies. The study attempts to answers the question: do lodging and gaming companies ranked highly on CSR initiatives outperform their counterparts that are not highly ranked? The study utilizes data of publicly traded US hospitality firms obtained from the CRSP and Mergent databases. The study also uses the Fortune CSR ranking survey for hotels and casinos. The findings suggest that lodging and gaming firms with well executed CSR initiatives have higher profit margins and higher return on equity than the rest of sampled firms. Future studies should examine CSR and financial data for multiple years as well as the types of CSR initiatives that lead to better financial performance in the hospitality industry. Further explorations can be carried out by utilizing multiple accounting, CSR and market measures as well as by examining a diversity of companies since more is likely to be revealed when variables such as leverage and business structure are subjected to further scrutiny.
Economic Climate and the Performance of US Hotels
(2009-01-01) Sheel, Atul