Journal of Hospitality Financial Management: Volume 25, Issue 1
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2017-13-07
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2016–2017 Restaurant Industry Performance and the JHFM Index
(2017-07-13) Sheel, Atul
The Effects of Insider Ownership and Board Composition on Firm Performance in the Restaurant Industry
(2017-07-13) Im, Jinyoung; Chung, Yeasun
This study aimed to investigate the relations among insider ownership, board composition, and firm performance in U.S. restaurant firms. The authors divided insider ownership into three categories: the equity ownership held per insider owners, the equity ownership held by nonexecutive (outside) directors, and the equity ownership shared by executive officers. Board composition was represented by board independence, board size, and chief executive officer duality. For data analysis, the authors conducted 319 observations from 31 firms. The authors found that 3 categories of insider ownership and board composition variables differently influence short-term operational profitability and long-term value. Managerial ownership negatively influences short-term profitability, whereas long-term value is affected not only by managerial ownership but also by a balanced dispersion of shares to each owner. Dual chief executive officers do not affect short-term profitability but negatively influence long-term value. The study findings provide more comprehensive understanding of the effect of the corporate governance system on firm performance in the restaurant industry.
Investment and Firm Value: Is There an Optimal Investment Level in Hotel Firms?
(2017-07-13) Dogru, Tarik; Sirakaya-Turk, Ercan
This study aimed to examine whether an optimal investment level exists in hotel firms. The authors examined the quadratic relation between investments and hotel firm value. The results show that there is an optimal investment level that maximizes firm value. However, the optimal investment level varies across firms on the basis of the quality of investment opportunities or under- and over investment problems. The optimal investment level is higher for hotel firms with under investment problems, which suggests that these firms have valuable investment opportunities. However, the optimal investment level is lower for hotel firms with over investment problems, which implies that shareholders of these firms perceive additional investments to be value destroying. These results support the postulations of the Q theory of investment, pecking order theory, and free cash flow theory. Practical implications are discussed in the realm of financing, investment, and dividend policies.
Managerial Competencies for U.K. Hotel Financial Controllers: Are They Hospitality Managers or Accountants?
(2017-07-13) Burgess, Cathy
This article aimed to identify the key managerial competencies required of hotel financial controllers and the importance of hospitality experience to their roles. Data from a longitudinal study of hotel financial controllers have been analyzed, gathered using a content analysis of job advertisements, a survey of U.K. hotel financial controllers and interviews with key financial managers. Using a grounded theory approach, the findings show that although there are many similarities with the generic accounting profession, the hotel finance role is unique. Their experience combining with hospitality management competencies to support operational managers. Their understanding of the complexity of the operation, in a dynamic and perishable environment, enables hotel financial controllers to act as business advisors to other managers, thereby enhancing profitability on behalf of stakeholders. Implications for industry include (a) the need for further promotion of hospitality finance as a valid career and (b) the importance of recruiting managers with experience of this distinctive industry context.
Budgetary Controls in Clubs: A Time-Tested Process for Financial Success
(2017-07-13) DeFranco, Agnes L.; Schmidgall, Raymond S.
Budgetary controls are essential for any business organization. This study provides a longitudinal comparison of budgetary control practices in the club industry in the past 4 decades, filling a literature gap for the club industry in the United States. This research aimed to document the various budgetary control practices in clubs; analyze whether such practices differ by the types of clubs, size, and profitability; and compare current practices with those in the past 3 decades. The authors administered a survey to the members of the Club Managers Association of America. With a prevalent participatory budgeting process, the budget is used widely at all levels of a club. The longitudinal comparison showed variance tolerance in food, beverage, and labor cost percentages tightened since the 1980s but was relaxed slightly in this present study. Subgroup analyses by demographic characteristics also showed statistically significant differences in a number of areas.