The impact of the SARS outbreak on Taiwanese hotel stock performance: An event-study approach

The severe acute respiratory syndrome (SARS) outbreak in 2003 weakened the Taiwanese economy. The tourism industry suffered the most, experiencing the highest stock price decline (approximately 29 percent) within a month of the SARS outbreak. This research examined the effect of the SARS epidemic on Taiwanese hotel stock price movements using an event-study approach. Seven publicly traded hotel companies experienced steep declines in earnings and stock price during the SARS outbreak period. On and after the day of the SARS outbreak, Taiwanese hotel stocks showed significantly negative cumulative mean abnormal returns, indicating a significant impact of the SARS outbreak on hotel stock performance. Empirical findings could be used to prepare businesses for the similar epidemics, such as a deadly bird-flu epidemic.     

Crisis Management During the SARS Threat

ABSTRACT

No one could have predicted the outbreak of SARS and its impact on the tourism business. Within a fortnight, hotel occupancy dropped by more than 80% to a single digit record. The hotel industry in Hong Kong was largely caught unprepared, and had to quickly work out ways in which to mitigate the loss of business and profit. This paper identifies the impact of SARS on hotels in Hong Kong, and the relevant human resources strategies used to tackle the crisis. The findings show that unpaid leave and involuntary separation were the most common immediate solutions adopted by the hotels.     

The response of hotel performance to international tourism development and crisis events

This study uses panel regression tests to examine the response of hotel performance to international tourism development and crisis events in Taiwan. Hotel performance measures are revenue (revenue per available room and occupancy rate), profitability (return on assets and return on equity) and stock performance. The crises were the earthquake on September 21, 1999 (the 9/21 earthquake), the terrorist attacks of September 11, 2001 in the US (the 9/11 terrorist attacks) and the outbreak of Severe Acute Respiratory Syndrome on April 22, 2003 (the SARS outbreak). This study makes four major contributions. First, test results confirm that international tourism development (ITD), proxied by the growth of total inbound tourist arrivals, has a more direct influence on hotel sales and profitability than it does on hotel stock performance. Second, this study identifies that the absence of a strong tie between ITD and hotel stock returns that was found in previous studies is due to the time-varying discount rate caused by investors’ changing expectations for the prospect of future cash flows from holding hotel stocks. Third, this study finds new evidence that while the poor performance of hotel stocks caused by the 9/21 earthquake and the 9/11 terrorist attacks was attributed to the loss of hotel sales revenue, the adverse effect of the SARS outbreak on hotel stock returns is attributed not only to decreased hotel sales revenue but also to the increased discount rate. Lastly, this study is the first to investigate whether the response of hotel stock returns to ITD depends on the state of economy and concludes that the response of hotel stock performance to ITD in business cycle contraction is statistically different from that in business cycle expansion. Further, although the influence of ITD on hotel stock performance is still irrelevant during expansion periods, ITD can significantly enhance hotel stock returns during contraction periods.     

Predicting Korean lodging firm failures: An artificial neural network model along with a logistic regression model

Using financial variables as predictors, this study developed logistic regression and artificial neural network (ANN) models to predict business failures for Korean lodging firms. While both models demonstrated comparable Type I errors, the ANN model showed considerably lower Type II errors for both in-sample and hold-out sample predictions. This study also found that interest coverage is the most important signal of business failure for the Korean hotel industry. This ratio is directly related to the hotel's solvency, ability to service debts and productivity of profits and can thus be regarded as a survival indicator of Korean hotel firms.     

The impact of hotel CSR for strategic philanthropy on booking behavior and hotel performance during the COVID-19 pandemic

During the novel coronavirus (COVID-19) pandemic, some hotels have engaged in corporate social responsibility (CSR) activities to help overcome the crisis. Given that most existing research examines the impact of hotel CSR on a single stakeholder, how hotel CSR activities in a crisis are perceived by multiple stakeholders is unknown. Drawing on the concept of strategic philanthropy, this study examines the impact of hotel CSR activities during the pandemic, such as providing accommodations to healthcare workers, on hotel firms' market value and prospective hotel customers’ booking behavior. Adopting mixed-methods approach, this study finds negative impacts of hotel CSR for strategic philanthropy on firm market value and customer booking behavior. The study result indicates that the value of hotel CSR depends on the nature and environmental contexts of CSR. Specific theoretical and practical implications are provided.     

The Determinants of the Travel Demand on International Tourist Arrivals to Thailand

The purpose of this study is to develop a travel demand model of international tourist arrivals to Thailand and to assess the impact of crisis incidents on Thailand's tourism industry. A 20-year (1987–2006) annual time series data of “number of international tourist arrivals”, “exchange rate”, “promotion budget”, and dummy variables of “Asia financial crisis”, “special promotional campaigns”, “SARS” and “tsunami” were used to develop the travel demand model by performing a multiple regression analysis. The results showed that travel demand of international tourist arrivals to Thailand could be explained by “exchange rate”, “promotion budget”, “Asia financial crisis” and “SARS”.     

An Analysis of Sexual Harassment in Korean Hotels from the Perspective of Female Employees

Abstract

Female employees in Confucian and collective societies are particularly susceptible to sexual harassment. Occupational norms can also influence sexual harassment. First, this paper introduces the legal development of the sexual harassment law in Korea. Second, it examines the prevalence of sexual harassment in Korean luxury hotels. The results of the first survey in the Korean hotel industry detail female employees' experiences, the characteristics of harassers, the reaction to harassment, effects of harassment and effective methods of prevention. The results of this paper will aid hotel practitioners, especially in Asian countries where sexual harassment laws have not been well developed, to monitor activities in workplaces where sexual harassment might occur.     

酒店市场营销:花得越多越好?

本文使用史密斯旅游研究(Smith Travel Research,STR)提供的酒店数据来探寻市场营销开支对酒店将来财务效益的影响.根据荻取的结论,我们有3大发现:1)市场营销支出对酒店一年后财务影响的边际效应呈递减分布;2)在个体酒店这个层次,总经营利润(gross operating profit)、纯经营利润(net operating income)以及总销售(revenue)有很强的自我预测性;3)对总经营利润、纯经营利润以及总销售的构成作进一步分析可以获得更好的预测效果.     

Financing behaviors of hotel companies

To understand financing behaviors in the hotel industry, this study used canonical correlation analyses by examining the interrelationships between cross-balance-sheet accounts of hotel companies. The study confirmed that hotel companies followed the four common practices about the cross-balance-sheet interdependencies identified in the other industries. This study also discovered a few unique financing features of the hotel industry: (1) maturity mismatching between property, plant, and equipment (PPE) and short-term liabilities; (2) adjusting the funding sources of inventories according to the internal and external environments; and (3) high dependency of operating assets on stockholder's equity. This study also explains different financing features across three periods during 1990–2004. The findings are expected to contribute to developing knowledge about the financing behaviors of hotel companies as related to their asset structures.     

Post-SARS tourist arrival recovery patterns: An analysis based on a catastrophe theory

In 2003, the Severe Acute Respiratory Syndrome (SARS) ravaged many Asian countries. The outbreak of SARS caused a crisis in the tourism industry in many parts of Asia in that year. The purpose of this study is to examine and to compare the post-SARS recovery patterns of inbound arrivals from Japan, Hong Kong and USA in Taiwan. Taking the cusp catastrophe model as its foundation, this study proposes a well-grounded approach to understanding the nature of the recovery processes and to explaining the difference between the recovery patterns displayed by arrivals from Japan and those from Hong Kong and USA. Implications regarding tourism promotion policies are drawn from the analysis.     

The Impact of Consumer Involvement on the Consumers' Perception of Service Quality-Focusing on the Korean Hotel Industry

Abstract

The consumers' evaluations of service quality may be impacted by their assessments of the actual service received, the service provider, and/or the service facility. Within a service marketing context, the more an individual believes the service is personally relevant, the more involved the individual may become with various aspects of the service. This study integrates these two important variables in consumer behavior, which are consumer involvement and service quality. This paper investigates the effect of consumer involvement on the consumer's perceived service quality by focusing on the Korean hotel industry.     

Determinants of using operating lease in the hotel industry

This study investigated the determinants of using operating lease in the hotel industry. The hotel industry has utilized operating lease not only for operating equipment but also as a financing instrument through ‘sales and lease back.’ This study found that hotel firms with less internal funds and/or with higher debt ratios are more likely to use operating lease. Contrary to the studies of other industries, hotel firms with less financially distressed are more likely to use operating lease. This study indicated that operating lease decrease as firm size increases, but only up to a certain level, after that level operating lease increase as firm size increases. Contrary to our expectations, the growth opportunity of hotel firms appeared to have no relationship to use of operating lease. These findings contribute to further understandings of hotel industry-specific information regarding what drives hotel firms to use operating lease.     

The origins and creation of the tourist hotel industry in Spain from the end of the 19th century to 1936. Barcelona as a case study

The aim of this paper is to analyse the origins of the hotel industry dedicated to tourism in the city of Barcelona, one of the most important tourist centres in the western Mediterranean. From the 1888 Universal Exposition to the 1929 International Exposition, and even later, we find several initiatives to set in motion an incipient tourist system which was truncated by the outbreak of the Civil War in 1936. In this system, we will here focus on the hotel industry based on the fact that at the end of the 19th century and the beginning of the 20th century, the majority of hotel establishments were not focused on tourism. It was only with the tourist development experienced by Barcelona during these decades that one can also speak of the birth of one of the most important tourism hotel offerings, both in Spain and Western Europe.     

Hosting in turbulent times: Hoteliers’ perceptions and strategies to recover from the Covid-19 pandemic

This research examines hoteliers’ perceptions and strategies in light of the Covid-19 pandemic and their predictions about an uncertain industry that has shifted attention to safety and hygiene concerns to regain guests’ trust. A cross-sectional study comprised of four assessments with hoteliers worldwide (N_{study 1} = 144; N_study2 = 100; N_study3 = 97; N_study4 = 66) was conducted between April and June 2020. Hoteliers’ forecasts and operating procedures were assessed in light of crisis management, providing important insights for researchers and the hotel industry. Remarkably, most of the hoteliers predict that the crisis is recoverable and believe that sales revenue will reach 2019 levels in 2021. They have implemented extraordinary recovery measures to make up for the loss of revenue caused by the crisis. From special health and safety protocols to long-term vouchers to promote reservations, strategic efforts to recover from the pandemic are ongoing.     

Evolution of hoteliers’ organizational crisis communication in the time of mega disruption

This research note explores the evolutionary process of corporate crisis communication to understand how international hotel enterprises respond to the present pandemic. Corpus linguistics was used as a computer-aided approach in assessing a large collection of naturally occurring texts. Press releases from hotel corporations listed in Fortune 500 within the period of January to April 2020 were curated and built into three corpora. Lexical patterns that evolved over the course of the first quarter of 2020 reveal that the lodging industry did not fully prepare for the crisis until March, while management was still dwelling on their past achievements even in February 2020. The overall tone, pre-crisis, reflected top management's demonstration of success and performance, attributed to the CEOs themselves; while it completely changed during the crisis. This study draws upon crisis management and organizational communication streams of work to advance prevailing theoretical accounts of organizational crisis communication.     

Impact-range performance analysis and asymmetry analysis for improving quality of Korean food attributes

The objective of this study is to assess the key-drivers of customer satisfaction and dissatisfaction and their asymmetric effects in the formation of customer satisfaction and dissatisfaction in Korean restaurants by using impact-range performance analysis (IRPA) and impact asymmetry analysis (IAA) approaches. Two hundred thirty-nine diners at two Korean restaurants in a U.S. southern metropolitan city participated in this study. Results validated the rigor of IRPA and IAA for identifying key determining factors and assessing magnitude among various restaurants’ attributes. Food taste, presentation, cleanliness, and fair price had severe impacts on CS. The theoretical and practical implications of this study's findings are included to enrich both academicians’ and restaurant industry professionals’ understanding of customers’ perceptions of and attitudes toward restaurants, and development of a marketing strategy.     

Investigating employees' deviant work behavior in the hotel industry during COVID-19: Empirical evidence from an emerging country

Employees in the hotel industry are among the most vulnerable groups that have been severely affected by the COVID-19 pandemic. Anchored on the general strain theory, transactional theory of stress and coping, and theory of justice, this study investigates the mechanism through which hotel employees' perceived job insecurity affects their deviant work behavior during the COVID-19 pandemic. A survey method was used to collect three-wave sample data from 988 hotel employees in popular tourist destinations in Vietnam. Multivariate data analysis reveals a positive relationship between perceived job insecurity and deviant work behavior, and this relationship is mediated by psychological distress. Furthermore, abusive supervision positively moderates the association between psychological distress–deviant work behavior and the indirect influence of perceived job insecurity on deviant work behavior through psychological distress. These findings are useful for hotel managers seeking to manage and develop employees in a global health crisis such as COVID-19.     

Hospitality crisis management practices: the Israeli case

This study attempts to examine hospitality crisis management practices within the context of the Israeli hospitality industry. The study develops a questionnaire that evaluates the importance and usage of four categories of practices: marketing, hotel maintenance, human resources, and governmental assistance. The findings illustrate which practices managers consider important and which practices managers actually use during an industry crisis. The paper concludes with recommendations for future research and management of crises.     

Impact of financial/economic crisis on demand for hotel rooms in Hong Kong

The main objectives of this study are (1) to identify the factors that influence the demand for hotel rooms in Hong Kong and (2) to generate quarterly forecasts of that demand to assess the impact of the ongoing financial/economic crisis. The demand for four types of hotel room from the residents of nine major origin countries is considered, and forecasts are generated from the first quarter of 2009 to the fourth quarter of 2015. Econometric approaches are employed to calculate the demand elasticities and their corresponding confidence intervals, which are then used to generate interval demand predictions. The empirical results reveal that the most important factors in determining the demand for hotel rooms in Hong Kong are the economic conditions (measured by income level) in the origin markets, the price of the hotel rooms and the ‘word of mouth’ effect. Demand for High Tariff A and Medium Tariff hotel rooms is estimated to have experienced negative annual growth in 2009 due to the influence of the financial/economic crisis, whereas that for High Tariff B hotel rooms is thought to have grown in 2009 after having decreased in 2008. The demand for tourist guesthouse rooms is expected to be the least affected by the crisis. Overall demand is predicted to recover gradually from 2010 onwards.