Journal Issue: Journal of Hospitality Financial Management: Volume 26, Issue 2
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Hotel Industry Performance in 2017-2018 and the JHFM Index
(2018-01-01) Sheel, Atul
How Is the Premium Calibrated for the Speculative Risk in Lodging Firms?
(2018-01-01) Khalilzadeh, Jalayer; Kizildag, Murat; Ridderstaat, Jorge; Madanoglu, Melih
The overarching themes of our paper are to calibrate the risk premium relative to the speculative risk parameters in capital markets and to analyze the pre-and post-recession patterns in the U.S. lodging portfolios from 2000 to 2016. We decompose several risk parameters speculated by the markets and risk-adjusted proxies to make solid judgments about the anomalies in excess return patterns and risk-reward trade-off calibration in our annualized heterogeneous portfolio sorts. Our primary findings reveal that our portfolio sorts did not return the efficient premium to the investors, as they should have been based on the speculative risk levels before the recession. However, after the recession, there was a correction in this pattern. Lastly, speculative risk-adjusted proxies and risk parameters generally co-move with the value-weighted benchmark.
The Impact of Data Breaches on Hotel and Restaurant Firm Stock Returns
(2018-01-01) Johnson, Mark S.; Kang, Min Jung; Lawson, Tolani; Singh, A.J.
Hospitality firms are susceptible to data breaches due to the high volume of information they keep on customers and employees. In this paper, we first present an analysis of the stock market’s reaction to data breaches at hospitality firms, and we compare these breaches to a matched-firm sample of retail firm breaches. Abnormal stock market returns indicate that hotel and restaurant firm stock prices went down by approximately 1.24% from data breach announcements. We find that the type of breach or number of times a firm has been breached does not alter the impact of a breach on firm returns. Additionally, we find that data breaches cause a greater loss of value for hotel firms than for restaurants. Finally, we find no support for the idea that hospitality firms exhibit larger negative effects compared to retail firms on a matched-pair analysis.
An Examination of Hospitality Corporation Takeovers Using Earnings and Cash Flow Measurements
(2018-01-01) Ramdeen, Collin
This study evaluates the ability of cash flow and earnings-based measures of return in the hospitality industry to assess the differences between target companies and their industries and to explain target companies’ abnormal returns during takeover periods. Target company abnormal returns observed during takeover periods are significantly related to both the difference between target company and average industry earnings to total assets and the difference in cash flow to total assets. Abnormal returns are negatively related to the difference in earnings to total assets, suggesting that target company assets are underutilized. The difference between target company and target industry cash flow to total assets is positively related to target company abnormal returns, indicating that acquiring companies value the near-term cash flow of target companies.
Club Capital Budgeting Practices over Four Decades
(2018-01-01) Damitio, James W.; Schmidgall, Raymond S.
The approach clubs take to evaluate capital budgeting projects has evolved over the years. This study provides evidence that clubs appear to continue favoring the payback approach to capital budgeting. In addition, the internal rate of return approach appears to be used more than in the past when evaluating projects. The study compares club capital budgeting practices over a four-decade time frame.