Journal of Hospitality Financial Management: Volume 16, Issue 2
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IPO Underpricing in the Hospitality Industry: A Necessary Evil?
(2008-01-01) Canina, Linda; Chang, Charles; Gibson, Scott
Hospitality initial public offerings (IPOs) experienced average first-day price increases of 17.1% between January 1981 and December 2001. This price increase, referred to as IPO underpricing, represents a substantial opportunity cost to the owners of the issuing firm. IPO underpricing is a critical consideration for managers of private hospitality firms who are considering going public. The increased liquidity, easier access to equity capital, and other benefits that accrue to publicly traded firms must be carefully weighed against the significant cost of underpricing. This paper explains the relationship between the marketing process of IPOs and the degree of underpricing. We test the hypothesis that underpricing is a reward for the information revealed by regular investors during the marketing process of the IPO. We explain why underpricing is a necessity for managers of private hospitality firms if they choose to go public. For managers of private hospitality firms who are considering taking their firms public, our results provide an historical benchmark for the underpricing that they can expect to transfer to outside investors which is different from that of the overall market. Beyond benchmarking the cost of going public, we test theories that predict underpricing and investigate the use of share allocations as an incentive for truth telling.
Payment Card Industry Data Security Standards (PCI DSS) Compliance in Restaurants
Kalkan, Kutay; Kwansa, Francis; Cobanoglu, Cihan
In order to improve the security of customer data, the credit card companies have come together to create a security standard, called Payment Card Industry Data Security Standard (PCI DSS), which involve mandatory requirements for merchants that accept credit card transactions. All restaurants that accept a credit card must comply with PCI DSS. The purpose of the study was to examine the PCI DSS compliance levels of Quick Service, Casual/Family and Fine Dining restaurants. A random sample of 1000 restaurant managers that are in charge of information technology at their companies and are subscribers of Hospitality Technology Magazine were surveyed. One hundred ninety managers responded to the survey. The results indicate that restaurants are far from full compliance with PCI DSS. This may have significant financial and non-financial consequences for restaurant owners and operators.
Implication of Statistical Indices in Hotel Room Revenue Analysis
Annaraud, Katerina
The purpose of this paper is to introduce hotel managers and hospitality educators to room revenue analysis method that is based on statistical indices. A paper presents a theoretical example of a room pricing and shows how changes in a total room contribution margin can be attributed to one of three changes: (a) changes in contribution margins for a hotel room with a specific rate, (b) changes in proportion (composition) of different rooms sold, and (c) changes in quantity of rooms sold. Hotel managers may use this approach as a supplementary tool for already existing yield management techniques.
AHFME Academic Member 2007 Total Annual Earnings Survey
Schmidgall, Raymond S.
This study was conducted to determine the 2007 annual earnings of hospitality financial management educators. Fifty percent of AHFME’s members affiliated with educational institutions responded. Annual base salaries ranged from $60,000 to $216,000. The lowest paid member is an assistant professor while the highest paid member is a full professor. Many respondents supplement their base salaries by both teaching during summer school and consulting. The total annual earnings of members ranged from $60,400 to $277,000. Hospitality financial management educators appear to be more highly compensated than the average college professor.