BUSINESS CYCLE AND LONG-TERM DEBT: EFFECTS ON HOTEL OPERATING LEASE

Authors

Myong Jae Lee, The Collins College of HospitalityManagement, California State Polytechnic University, Pomona, CA
Chang Huh, College of Hospitality and Tourism Management, Niagara University, Lewiston, NY
Ju Yeong Lee, The Collins College of HospitalityManagement, California State Polytechnic University, Pomona, CA

Type of Submission

Refereed Article

Abstract

Over the last 25 years, many hotel operators have chosen to lease their property instead of owning as a financing strategy. This paper examines the combined and separate contributions of business cycles and a firm’s level of long-term debt on hotel owner/operator use of operating leases. The results indicate that operating leases were used more often during contracting business cycles and less often during cycles of expansion. According to the results, operating leases and long-term debt are not complementary, although they are increasingly treated as complements when the economy suffers a downturn.

DOI

10.1080/10913211.2015.1107359

Recommended Citation

Lee, Myong Jae; Huh, Chang; and Lee, Ju Yeong (2015) "BUSINESS CYCLE AND LONG-TERM DEBT: EFFECTS ON HOTEL OPERATING LEASE," Journal of Hospitality Financial Management: Vol. 23: Iss. 2, Article 5.
DOI: 10.1080/10913211.2015.1107359
Available at: https://scholarworks.umass.edu/jhfm/vol23/iss2/5