Internationalization and exposure to foreign currency risk: An examination of lodging firms

Corporate internationalization has often been linked with exposure to risk arising from foreign currency valuation. The theory of economic exposure, however, postulates that when demand and activities are sensitive to purchasing power parities, the value of domestic firms can also be influenced by exchange rates. Suspecting that domestic lodging firms are subject to foreign currency risk, the current study applied a cash-flow model in order to quantify the operating exposure of US lodging firms against currencies that significantly account for visitors to the U.S. Heckman's two-step estimation was subsequently used to examine the effect of internationalization on estimated exposure coefficients. The results indicated that domestic firms are more likely to sustain foreign currency risk, as multinationals may be capable of diversifying away the risk. The higher foreign sales ratio of lodging firms led to greater foreign currency risk, while the increased degree of operational hedging and franchising mitigated the foreign currency risk of multinational lodging firms.     

Asset-light business model: An examination of investment-cash flow sensitivities and return on invested capital

The purpose of this study is to investigate the effects of the asset-light business model on investment-cash flow sensitivities and return on invested capital in the lodging industry. Little research has explored the link between investment and asset ownership structure. The current study provides an alternative approach to examining investment behavior and return on invested capital, focusing on the unique characteristics of asset ownership among lodging firms. The findings of this study provide important implications for lodging investors and shareholders regarding the strategic use of the asset-light business model for aiding lodging firms’ efficient investments and delivering high return on invested capital.     

Lodging REIT Performance and Comparison With Other Equity REIT Returns

This study investigated the performance of lodging real estate investment trusts (REITs) over a 13-year period. The study period was highlighted by economic growth, decline, geopolitical, and social events. These conditions and events affected lodging demand, and consequently the performance of the underlying REIT asset, the lodging facility. The results of the study indicated that overall, the performance of lodging REITs was inferior to the market portfolios as a whole. Lodging REITs' performance was also inferior to other equity REITs except for retail and specialty REITs. These findings suggest that the lodging REIT sector might not be as resilient as other equity REIT subsectors.     

The interest rate exposure of lodging firms

The purpose of this study is to investigate the interest rate exposure of lodging firms and to determine whether the use of interest rate derivatives reduces this exposure. Using a sample of 47 lodging firms from the period from 2000 to2004, the first stage regression results show that most lodging firms face exposure to interest rates. The key finding of this study is a significant decline in exposure even after controlling for interest and foreign exchange risk. Additional findings show firm size, floating rate debt, interest coverage ratio, and foreign sales ratio to be important determinants of interest rate exposure.     

Asset-light strategy and real estate risk of lodging C−corps and REITs

The asset-light strategy has been gaining popularity among practitioners for its virtues in lowering capital investment burden and allowing efficient expansion. Meanwhile, arguably the greatest advantage of the strategy—a mitigating effect on the real estate risk exposure—has yet to be validated. To empirically test this effect, this study adopts a comparative approach, utilizing data on both lodging C-corporations and real estate investment trusts (REITs). Yearly firm-level real estate betas are estimated through an augmented Fama-French asset-pricing model for all lodging firms and REITs between the years 2002–2016, and further used for a second-stage analysis on their relationship with real estate ownership and liquidity. Findings reveal that 1) lodging firms are significantly less exposed to real estate risk than REITs, 2) lodging firms may still be conditionally exposed to real estate risk under liquidity constraints, and 3) certain unique characteristics of REITs render differences in the effects of liquidity.     

Appreciative and consumptive lodging attributes: Conceptualization and measurement

This study uses an appreciative-consumptive (A-C) approach in the conceptualization and measurement of lodging attributes. While the A-C framework has been effectively utilized in related fields like recreation and tourism, it remains undeveloped in the context of lodging. The purpose of this study is to elucidate a conceptual application of the A-C framework to the lodging sector, develop a scale that can be used to measure A-C constructs in the context of lodging for leisure travelers, and demonstrate the research and practical utility of this scale via use in a structural model and cluster analysis. The instrument developed in this study is dubbed the Appreciative-Consumptive Lodging Attribute Scale (A-CLAS). The A-CLAS is envisaged to represent a means for novel research into the study of lodging attributes, and a compelling new platform from which to envision the design, management, and maintenance of the lodging experience.     

Compensation practices in the lodging industry: Does top management pay affect corporate performance?

The current study examines the relationship between executive compensation and firm performance in the U.S. lodging industry. It is not clear-cut whether performance leads to compensation or compensation drives firm performance. Our contention is that cash and lagged equity-based compensation drive the firm performance. Our findings suggest that chief executive officer's (CEO) contemporaneous cash-compensation and one-year lagged equity-compensation positively affect the accounting performance measures return on assets and Tobin's Q; but neither compensation components affects the market-performance measure, stock returns, in the lodging industry. Quantitatively similar findings are found for the chief financial officer (CFO). Further robustness test show that further lags of equity compensation of both named executives do not result in increased stock performance in the lodging industry.     

Supply-side investments: An international analysis of the return and risk relationship in the Travel & Leisure sector

This study investigates supply-side investments in the tourism sector, analysing the return and risk relationship of investments in tourism across several countries. The performance of tourism sector companies listed on the stock exchange, for the top one dozen countries according to the World Economic Forum (WEF) tourism rankings, is investigated by region, across these countries and within each country by comparison to other sectors. Several metrics are used to compare the risk-adjusted returns, over a 15-year period ending March 2007 and sub-periods to check the persistence of performance over time. The results present a strikingly different ranking than those of the WEF. The implications for the flow of investment funds are of importance in a global capital market. Money will flow to those investments with the highest expected returns for a given risk level and this has consequential impacts for economic growth and employment in the tourism sector.     

中国酒店业能源消耗水平与低碳化经营路径分析

低碳旅游是在低碳经济背景下旅游管理研究的热点问题。旅游业虽然被认为是低碳经济的一个重要组成部分,但关于旅游业的能源消耗水平研究一直缺乏定量研究成果。文章以中国酒店业为例,采用投入产出分析方法,对中国酒店业的能源消耗水平进行了定量分析。研究表明,中国酒店业每万元的总产出需要消耗330.99千克标准煤。通过产业部门间的比较研究,发现中国酒店业整体仍然处于高耗能阶段,酒店业在节能减排以及发展低碳经济方面还不具有比较优势;通过比较研究,发现中国酒店业能源消耗水平与部分发达国家相比,还存在很大差距;通过与本地居民能源消耗水平的比较,发现酒店住客的日常能源消耗量远远高于城市居民日常生活的能源消耗量。最后,针对中国酒店业在能源消耗方面存在的问题,提出了中国酒店业低碳化经营的发展路径。     

Service Quality

Abstract

A methodology is suggested based on the assumption that quality is perceived in a given situation when the individual consumer determines the attributes that make up service quality rather than the service provider. Results gained from a two-part study (state tourism and commercial lodging facilities) that use the suggested methodology showed differences in attributes between consumers and the service providers when compared to another state tourism study and a guest comment card from a nationwide lodging franchiser.     

Going green: the adoption of environmental initiatives in Michigan's lodging sector

The greening of tourism activities continues to receive attention from industry members and academics. This paper assesses familiarity with, perceived benefits of and adoption levels of various environmental initiatives within the accommodation sector in Michigan, USA, based on 217 responses to an online survey of lodging providers. Variations in familiarity with various green schemes, as well as in perceived benefits of the adoption of green business practices, were assessed across property characteristics, including type, ownership, location and size. The existence of a written environmental policy was associated with higher levels of adoption of green practices for less than half of these practices; fewer than anticipated. Interesting differences in the practices adopted between smaller, independent and larger chain properties emerged, with the smaller independents more likely to engage in community-oriented activities and use local and/or organic products. The almost complete implementation of the proper disposal of hazardous waste contrasted with minimal use of keycards to control power use. The findings have implications for the promotion of green initiatives to the lodging sector, particularly in terms of which agency or organization could best deliver this messaging. Potential synergies between the findings and the award-winning tourism marketing campaign, Pure MI, are discussed.     

Valuing for Ogasawara: Implications for sustainable practices within the accommodation sector

This paper explores valuing for Ogasawara on the part of the accomodation host and examines interest in developing sustainable practices within this sector. Data is drawn from an interview survey conducted in 2002 and a focus group meeting conducted in 2003 in Ogasawara, Japan. The data were collected from lodging owners and managers (LOM) who operate lodging businesses on Chichijima. The primary themes that emerged from these data were related to preservation, development, social impacts, carrying capacity and sustainable practices. The data revealed a conflict between preserving natural and cultural resouces and developing tourism at this site. There was strong concern reported for protecting the environment, as well as strong concern voiced over the dwindling number of tourists. While some interest was expressed for the development of sustainable practices within the accommodation sector, the understanding and application of such practices is relatively underdeveloped.     

Extent of hedging in the US lodging industry

This study investigates the extent of hedging in a sample of lodging firms over a five-year period from 2000–2004. The findings document that lodging firms predominantly use interest rate swaps and options to manage interest rate risk exposure. Lodging firms primarily use these instruments as cash flow hedges of their long-term debt liability. The findings indicate that the hedging decision should be modeled separately using a two-step model. The results are robust to alternative specifications and provide evidence to show financial leverage, floating rate debt, information asymmetry, firm size, cash flow volatility and diversification, to be significantly related to the amount of hedging.     

Guest Satisfaction in the U.S. Lodging Industry Using the ACSI Model as a Service Quality Scoreboard

SUMMARY

This article extracts data from the American Consumer Satisfaction Index (ACSI) for the lodging industry and for the six hotel brands included in the study. Guest satisfaction scores are analyzed for three important standards: overall satisfaction, expectancy-disconfirmation, and customer experience compared to an ideal product. Findings indicate that [1] the lodging industry scores slightly better than the entire service sector and about the same as the national score, and [2] there is significant variation in satisfaction scores among the six brands tested. Implications for management are included.     

Performance Analysis of Lodging REITs in Relation to Market Segments

This article examines the financial performance of lodging real estate investment trusts (REITs) in relation to their market focus. Secondary data were collected for from 2004 to 2008 from lodging REITs that were traded on major U.S. stock exchanges. Data envelopment analysis (DEA) was used to assess the efficiencies of market segments to generate financial performance. The results showed that two lodging REITs were consistently efficient during the study period relative to other lodging REITs. In particular, lodging REITs investing and/or operating in one or more relatively similar market segments and those focusing on the upper-upscale segment were more efficient than others. This study could provide managers, owners, and investors of lodging REITs preliminary evidence of the relationship between market segments and firm performance. This article also proposes a framework for future investigations to assess the performance of REITs.     

Marketing decisions,customer reviews,and business performance: The use of the Toprural website by Spanish rural lodging establishments

Modern travelers often rely on reviews provided by other consumers online, or electronic word of mouth (eWOM), to choose their accommodations. This study considers the effects of marketing decisions by rural lodging establishment owners (i.e., price and advertising expenditures) on eWOM (i.e., ratings and number of reviews), as well as the effects of eWOM on business performance. The results rely on marketing data and customer reviews obtained from a leading rural tourism infomediary website, related to 202 Spanish rural lodging establishments. A complementary survey also provided information about the lodging establishments' performance. The study thus reveals that price and advertising expenditures affect eWOM; in turn, eWOM affects business performance. Moreover, owners' experience with the infomediary slightly moderates the link between eWOM and performance.     

Impacts of timeshare operation on publicly traded U.S. hotels’ firm value,risk and accounting performance

With 1615 timeshare resorts and 176,232 units in the U.S. in 2006 and making an economic impact of approximately $92 billion on the U.S. economy in 2005, the timeshare industry has proved as one of the fastest growing segments of the hospitality and travel industry. However, little research has investigated the impacts of timeshare operations on lodging firms’ financial issues. The main purpose of this study is to investigate the impact of timeshare operation on lodging firm's financial value, risk and accounting performance. Findings suggest that the existence of an inverted U-shaped relationship between timeshare operation and lodging firm value; however timeshare operation shows a U-shaped relationship with ROE and no relationship with risk.     

Shaping tourism trends — the commercial perspective

Continuing development in the tourism industry will require the application of proper commercially based techniques. Governments and local authorities nowadays require a return on community investments. The commercial sector is able to create new tourism trends by identifying opportunities for new product development and thereby extending demand. Sound research and marketing to ensure that a product gives adequate financial return should encourage government investment and be of mutual benefit to both government and the tourism industry. Commercial principles can also be applied to protect a country's cultural heritage.     

Energy benchmarking in support of low carbon hotels: Developments,challenges, and approaches in China

Achieving effective and objective energy benchmarking for hotels is integral in fostering the sustainable development of the lodging sector. In this work, we reveal the major and minor streams of hotel energy benchmarking and ascertain that the most popular approach in benchmarking is normalized energy use intensity (EUI) based on floor level. Previous efforts to establish EUI indicators using subsystem average, data envelopment analysis (DEA), and regression technique are also studied. We propose that hotel energy benchmarking based on floor area is useful from the top-down management perspective. However, on a practical perspective, energy benchmarking based on facilities should be the first priority for hotel management or owners. Compared with the general energy benchmarking in the building sector, we find that the hotel sector lags behind in the adoption of computer modeling for benchmarking.     

The moderating role of brand diversification on the relationship between geographic diversification and firm performance in the US lodging industry

In spite of the prevalence and strategic importance of diversification for US lodging firms, research on the effects of diversification has been insufficient in the hospitality literature. Especially, an examination of the moderating effect of brand diversification on the relationship between geographic diversification and performance of US lodging firms has been lacking in the literature in various disciplines, including hospitality field thus far. This study aims to first investigate the individual effect from each of brand and geographic diversification strategy on firm performance in the US lodging industry. Further, to investigate effects of diversification comprehensively, this study examines the moderating effect of brand diversification on the relationship between geographic diversification and performance of US lodging firms. The study's results indicate a positive and significant effect of geographic diversification on firm performance, an insignificant effect of brand diversification, and a positive and significant moderating effect of brand diversification in the US lodging industry.