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.     

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.     

Investigating public relations as a destination promotion strategy: the role of multiple dimensions of publicity

ABSTRACT

This study investigated the relationships between tourism-related public relations, publicity, and tourism demand. Publicity was split into three aspects: attention, prominence, and valence based on multidimensionality of media salience. These relationships were tested in the context of United States tourists to South Korea using a system of equations. Empirical findings indicated that public relations and the three aspects of publicity had a significant effect on tourism demand. Public relations was also found to have a significant effect on the prominence and valence dimensions of publicity. However, public relations did not influence the attention dimension. Theoretical and practical implications along with suggestions for future research are presented.     

Tourism firms’ environmental rankings and financial performance: a multidimensional scaling approach

The relationship between firms' environmental initiatives and financial performance continues to generate considerable interest. Despite the progress made in the study of this relationship, there is a paucity of research addressing tourism sector firms’ simultaneous environmental and financial performance. This research sheds light on the link between tourism-related firms’ environmental and financial performance. Results indicate that firms that performed well financially ranked higher on environmental initiatives. This suggests that firms’ financial performance may influence environmental performance since firms with good financial performance are better able to allocate more resources to support environmental initiatives. However, since investments in environmental initiatives require financial and manpower resources, firms should only invest in such initiatives if resources are not diverted from core functions, since such actions could affect overall firm viability. Results also indicated that firms that have adopted green initiatives can be classified into four clearly defined categories: progressive firms, which includes firms that simultaneously excel on green initiatives and financial performance; repressive firms or those that perform poorly on both; aggressive firms or those that perform admirably financially but poorly on environmental initiatives; and green firms or firms that perform admirably on green initiatives but poorly financially.     

Examining the link between meetings,incentive, exhibitions,and conventions (MICE) and tourism demand using generalized methods of moments (GMM): the case of Singapore

ABSTRACT

This study investigates the impact of meetings, incentive, exhibitions, and conventions (MICE) on tourism demand in Singapore over a period of 10 years (2003–2012). Past studies have shown that MICE matters a great deal to host destinations but researchers have rarely conducted any empirical research to verify the significance of this sector to tourism demand. Our study intends to fill the gap by using Difference and System generalized methods of moments (GMM) estimators for dynamic panel models. Tourism demand is measured by tourist arrivals from the top 30 origins, and the influence of real income of the tourist generating country and real exchange rate is also examined. The GMM results show a significant positive relationship between tourism demand and MICE (with international meetings as proxies). Additionally, the findings reveal that tourism demand growth is significantly positive (negative) with respect to changes in income (relative prices). The coefficient of lagged tourist arrivals indicates a high level of habit persistence and revisiting.     

旅游业上市公司多元化经营能够降低公司风险吗？——基于2004—2012年A股上市公司数据的实证研究

我国的旅游业上市公司普遍存在进入房地产业、高新技术产业等行业的多元化经营现象。国内外学者对多元化经营与公司风险之间的关系展开了一系列的研究,但是没有得出一致的结论。截至目前,对旅游类企业多元化经营能否降低公司风险的研究仍较为欠缺。因此,文章以2004—2012年国内23家A股旅游业上市公司1的184个截面数据为样本,利用多元回归分析法检验了旅游业上市公司多元化经营对其公司风险的影响。旅游行业自身的行业特征及其多元化特点使得针对旅游业上市公司多元化经营行为的分行业研究产生了与以往整体层面的研究截然不同的结论：旅游业上市公司多元化经营能够降低公司的财务风险,但无法降低公司的经营风险。进一步对多元化类型进行区分后发现：旅游业上市公司相关多元化水平的提升可以显著地降低公司的财务风险,但无法显著地降低公司的经营风险;而非相关多元化水平的提升无法显著地降低公司的财务风险与经营风险。基于上述研究成果,文章从促进融资体系多元化、完善主业发挥自身优势、谨慎选择多元化行业3个角度对旅游业上市公司的多元化发展提出了建议。     

Determinants of commodity price risk exposure in the restaurant industry: An analysis by commodity price cycles

The objectives of the present study were to (1) investigate the level and the extent of commodity price risk exposure in the restaurant industry and (2) identify the determinants of risk exposure. The risk exposure was estimated by 60-month rolling regressions based on equity returns. The determinants of equity risk exposure were proposed based on a discounted cash flow model. The results found that 35.39% of sample restaurant firms are exposed to commodity price risk. The level of equity risk exposure was estimated to be 1.148 during commodity price booms and 1.031 during slumps. Empirical testing was consistent with the model prediction that operating leverage and financial leverage are effective tools in managing risk exposure, but the effects are asymmetric during commodity price booms and slumps. Financial leverage was found to be more effective than operating leverage.     

Threat of infectious disease during an outbreak: Influence on tourists' emotional responses to disadvantaged price inequality

The ongoing COVID-19 pandemic has negatively influenced the global tourism industry. Despite the documented negative impacts of diseases on tourism demand and people's perceived health risk, researchers have seldom examined the psychological responses of tourists travelling during an infectious disease outbreak. We therefore conducted three studies to examine this key aspect, and our findings indicate that tourists have a strong negative emotional reaction towards disadvantaged tourism-related prices in response to a high (vs low) infectious disease threat. Furthermore, risk aversion acts as an underlying mechanism driving this effect: tourists are more risk aversive under the threat of an infectious disease, which consequently magnifies their negative emotional reaction. At last, theoretical and practical implications of these findings for tourism are discussed.     

Effects of different dimensions of corporate social responsibility on corporate financial performance in tourism-related industries

Although the stakeholder framework proposes the multidimensionality of corporate social responsibility (CSR) (Clarkson, 1995), previous research has yet to investigate the relationship between certain dimensions of CSR and corporate financial performance (CFP) in tourism-related industries. The purpose of this study was to disaggregate CSR into five dimensions based on corporate voluntary activities for five primary stakeholder issues: (1) employee relations, (2) product quality, (3) community relations, (4) environmental issues, and (5) diversity issues, and examine how each dimension would affect financial performance among firms within four tourism-related industries (airline, casino, hotel, and restaurant). While all CSR dimensions were proposed to have positive financial effects, results revealed that each dimension had a differential effect on both short-term and future profitability and that such financial impacts varied across the four industries. The findings can provide tourism managers with insights into which dimensions of CSR activities would improve their companies’ financial performance.     

Scenario analysis of tourism's water footprint for China's Beijing–Tianjin–Hebei region in 2020: implications for water policy

Based on the life cycle footprint analysis method, this paper undertakes a comprehensive assessment of tourism-related direct and indirect water consumption under four counterfactual tourism scenarios in China's Beijing–Tianjin–Hebei metropolitan region (Jing-Jin-Ji), which has been increasingly constrained by extreme water stress. Food consumption appears to have a major impact on the tourism water footprint (WF) such that high calorie-dominated diets are nearly five times more water intensive than vegetable diets for a typical foreign tourist. It is necessary to design specific policy to improve water-use efficiency in upstream agricultural production, in parallel with reduced high-calorie food intake in tourism products supply. Furthermore, transport mode is found to have significant impacts on domestic tourist WF due to the stark variation in water embodied in upstream fuel production and supply. Forecasts for tourism's WF under low and high scenarios suggest that tourism may account for a considerable proportion of total water use in Jing-Jin-Jiby 2020. Specifically, tourism patterns appear to be a determining factor influencing water consumption across different scenarios. It is argued that water policy needs to emphasise water-use efficiency to raise awareness of tourist WF by differentiating water prices for various purposes and segments of the tourism consumer market.     

Impacts of geographic diversification on restaurant firms’ risk: Domestic vs. international diversification

In the hospitality context, the diversification literature has evolved to mostly focus on the impact of diversification on firm performance. However, without accounting for risk, the effect of diversification on firm value likely provides an incomplete picture. Therefore, this study investigates the influence of domestic and international geographic diversification on restaurant firms’ risk. This study uses the Berry-Herfindahl Index to measure the degree of domestic and international geographic diversification. Findings show a non-linear relationship between geographic diversification and restaurant firms’ risk. However, different shapes of the non-linear relationship are revealed between domestic and international geographic diversification and between operational and market-based risk. The results of this study indicate that the risk-reduction effects argued from the modern portfolio theory may be partially applicable to the geographic diversification for restaurant firms, suggesting a different view toward financial diversification and corporate diversification.     

Why Seniors use Mobile Devices: Applying an Extended Model of Goal-Directed Behavior

Seniors’ use of mobile devices for tourism-related purposes is an emerging social trend, but there is little theoretically based research on the topic. This study examines seniors’ usage of mobile devices for tourism-related purposes, applying the extended model of goal-directed behavior. Usefulness and enjoyment are shown to have significant effects on seniors’ use of mobile devices for tourism purposes and prior knowledge of information technology has a significant impact on seniors’ desire and behavioral intention to use mobile devices for tourism-related purposes. This study offers theoretical and practical contributions to tourism academics and practitioners.     

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.     

Nonconstant reputation effect in a dynamic tourism demand model for Spain

Following the ideas of the Tourism Area Life Cycle (TALC) theory, we propose a dynamic econometric model for tourism demand where the reputation effect (the effect of the lagged demand on the current tourism demand) is not constant, but dependent on congestion. We test the model using panel data from Spanish regions during the period 2000–2013. Two estimations are performed depending on whether the tourists' origin is domestic or international. The results show that the reputation effect is not constant in both estimates, supporting the idea that tourism congestion influences tourist arrivals in Spain.     

Firm growth patterns: Examining the associations with firm size and internationalization

Understanding the growth patterns of an industry is essential for establishing sustainable growth strategies. However, until recently little had been known about restaurant firm growth patterns. Thus, this study examined the growth patterns of restaurant firms in association with firm size class and internationalization, after controlling for total and long-term debt leverage, retained earnings, and growth opportunity. Overall, the results of this study showed that small restaurant firms grow faster than large restaurant firms but the growth rate decreases as firm size increases. Furthermore, the growth rate of large firms decreased more slowly than small firms. In terms of internationalization, this study found that as firm size increases, the growth rate of small international firms decreases more rapidly than that of small domestic firms. However, the growth rate of large international firms decreases more slowly than that of large domestic firms. These findings indicate the appropriateness of internationalization strategies for large restaurant firms but the inappropriateness of these strategies for small firms. More detailed results and discussion are also provided.     

境外邮轮旅游市场研究综述

邮轮旅游在我国属于一种新兴的旅游方式,近年来受到产业界和理论界的普遍关注.但目前国内对邮轮旅游市场的研究比较匮乏,所能提供的有关邮轮旅游市场需求特征的信息很少.文章全面检索了国外邮轮旅游市场研究的相关文献,并进行了文献统计分析、主题内容分析.研究发现:国外该领域研究文献的大量出现是在2000年之后,全部为实证研究,研究内容包括邮轮游客基本特征和市场细分、邮轮旅游动机、邮轮旅游决策及影响因素、邮轮旅游体验质量和满意度等方面.在此基础上,文章还就未来国内邮轮旅游市场研究和业界实践提出了若干建议.     

Visa restrictions and their adverse economic and marketing implications – Evidence from China

Governments spend considerable public resources, including tax dollars, on marketing their cities or countries in order to become a strong brand attractive for exports, foreign direct investment and tourism. Ironically at the same time, self-imposed and strict visa regulations that can potentially hamper the productivity of marketing and branding are fairly common. There are valid reasons for imposing strict visa regulations, two of the most important being national and economic security. Although strict visa regulations are a common phenomenon around the world, the tourism academia have yet to argue against strict visa regulations by providing empirical evidence on their potential impact on tourism demand, and hence the economy. The current study is a pioneer attempt to generate awareness about the potential detrimental impacts of visa restrictions on a country’s economy, by using the case of People’s Republic of China, one of the countries known to have a history of strict visa regulations. The research reported in this paper was based on the standard tourism demand function, which models the causal relationship between tourism demand and a number of macroeconomic variables. The autoregressive distributed lag model (ADLM) was used since it has a dynamic specification that takes the time path of the tourist decision-making process into consideration by using both current and lagged values of variables. Results show the negative effect of visa regulations on both country-level and prefecture-level economies. Implications are discussed and recommendations provided.     

Foreign tourism in Greece: An economic analysis

Foreign exchange earnings are vital for developmental efforts, particularly in the industrial sector. However, Greece's visible exports alone do not generate sufficient income for such purposes, thus providing a strong justification for blending tourism into the country's general economic development strategy. From a development perspective, foreign exchange earnings are only one aspect of the total economic picture; eg the development of an export industry has varying repercussions on income, employment and other economic activity. The extent of these effects will vary according to the linkages between industrial sectors. This article assesses the importance of tourism to the Greek economy in terms of its impact on foreign exchange earnings and the balance of payments. Tourism's contribution to gross domestic product, employment and other economic activity is also examined.     

Effects of emotional solidarity and tourism-related stress on residents' quality of life

This study explores how residents' lives are influenced by their emotional and psychological responses to tourism development. In particular, we propose that residents' emotional solidarity with tourists and perceived tourism-related stress significantly affect individuals' quality of life (QoL) within their community. Findings reveal that the relationship between residents' emotional solidarity with tourists and perceptions of QoL are mediated by perceived tourism-related stress. Though the research connecting residents' emotional and psychological responses to tourism and their QoL continues to grow within the tourism literature, this work marks a new research direction that establishes connections among residents' emotional solidarity, stress, and QoL, using an integrated model. By focusing on the emotional and psychological aspects of tourism impacts rather than tangible ones, this study provides alternative perspectives to the existing QoL literature. Findings further expand the nomological network of tourism and the QoL research paradigm and inform tourism development policy.     

Advertising expenditure,intangible value and risk: A study of restaurant companies

This study investigates the relationships between advertising expenditure, intangible value, and risk in stock returns of restaurant firms between 2000 and 2005. Tobin's Q was used to examine intangible value, and the variance of common stock return was used to measure the investment risk. The results indicate that the level of advertising expenditure has a significant positive effect on the intangible value of the firm, suggesting that advertising expenditures could help generate intangible value in restaurant firms. However, this study did not support a significant relationship between the advertising expenditure level and the stock return risk of restaurant firms.