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.     

Work stress and well-being in the hotel industry

Employee stress is a significant issue in the hospitality industry, and it is costly for employers and employees alike. Although addressing and reducing stress is both a noble goal and is capable of resulting in expense reductions for employers, the nature and quantity of hospitality employee stress is not fully understood. The first aim of this study was to identify common work stressors in a sample of 164 managerial and hourly workers employed at 65 different hotels who were each interviewed for eight consecutive days. The two most common stressors were interpersonal tensions at work and overloads (e.g., technology not functioning). The second aim was to determine whether there were differences in the types and frequency of work stressors by job type (i.e., managers versus non-managers), gender, and marital status. Hotel managers reported significantly more stressors than hourly employees. There were no significant differences by gender or marital status. The third aim was to investigate whether the various stressors were linked to hotel employee health and work outcomes. More employee and coworker stressors were linked to more negative physical health symptoms. Also, interpersonal tensions at work were linked to lower job satisfaction and greater turnover intentions.     

Do hotel REIT companies face investment constraints? A comparison with C-corporation hotel companies

This study investigates whether corporate investment by REIT hotel companies (hotel REITs hereafter) is more constrained than investment by C-corporation hotel companies (hotel C-corps hereafter). The investments of hotel REITs and hotel C-corps are examined by comparing the sensitivities of investment to cash flow and investment opportunities between the two groups. Results show that the sensitivity of investment to cash flow is positive and significantly higher for hotel REITs than for hotel C-corps, suggesting that hotel REITs are likely to experience more constraints on their corporate investment. This finding suggests that hotel firms and owners should be more cautious about electing to be a REIT if they are planning large investments in the future. In addition, this finding has policy implications; even a small reduction in the rate of mandatory dividend payouts could significantly increase hotel REITs’ corporate investments.     

Re-examining the overcapacity of the US lodging industry

Although the deteriorating profitability of the US lodging industry has been repeatedly attributed to overcapacity, there has been little research on the causes of overcapacity. The authors suspect that this issue stems from the lack of a working definition of optimal capacity level. This study evaluates the optimum capacity of the US lodging industry based on the fundamental price theory, which posits that prices are determined through equilibrium. Results of the simultaneous equations model show that the industry has an incentive to maintain overcapacity because the outcomes of under-capacity are even less desirable. The uncertainty of demand further encourages overcapacity to some extent. Historical overcapacity cycles in the US lodging industry suggest that overcapacity seems to be an outcome of unexpected demand shocks, rather than the consequence of irrational overbuilding. Implications for the industry and suggestions for future research are presented along with the study findings.     

Strategy, organization structure and success in the lodging industry

Has Hyatt's success been the result of the way it has structured its organization? Research evidence has accumulated indicating that the way an organization is structured can have profound effects on its performance.Should every lodging organization adopt the same type of structure? Probably not! However, determining the appropriate organizational structure for a lodging organization requires considerable thought and analysis.The results of some of the more compelling research findings relative to the factors that affect the structuring of an organization and the relationship between organizational strategy, structure and effectiveness are examined. Some of these concepts are then applied in an analysis of the structure of three different lodging organizations.     

Web-based permission marketing: Segmentation for the lodging industry

Permission marketing is becoming an important tool in maintaining relationships with travelers via the Internet. Its growing importance can be seen in tourism marketing, specifically in the lodging industry. With an increase in industry use, the effectiveness of this technique needs assessment. This paper initiates this process by examining current methods used to collect contact information for the purpose of permission marketing. Three segments of the market are identified and compared based upon their willingness to supply contact information. Significant differences were found in socio-demographics, online habits, trip characteristics, and website design preferences. Implications for lodging marketers are presented and future research topics are discussed.     

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.     

Break-even analysis — a useful management tool in the lodging industry

The break-even point is an important tool of financial management. In this article I will describe a concept and basis for analysis that is quite different from the usual technique. In order to determine the portion of each expense that is fixed and the portion that is variable, which is the basis for calculating the break-even point, we will use linear regression analysis, a technique based upon the relationship between two variables. Detailed monthly operating statements are required for a complete departmental analysis using this technique; however, for the purpose of this article I have taken a shortcut and used only monthly sales and operating expenses. The amounts are taken from the monthly operating statements of a 352-room suburban hotel.     

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.     

Barriers to EMS in the hotel industry

While some hotels have adopted the formal environmental management system (EMS) or the internationally recognised ISO 14001 Environmental Management Standard for the sake of the environment—or other claimed benefits—many hotels are still standing at the crossroads in adopting EMS. This exploratory study was conducted with the aim of investigating the barriers to EMS in the hotel industry in Hong Kong SAR. Of the 330 questionnaires mailed, 83 were returned. Using exploratory factor analysis to identify interpretable orthogonal factors, six factors that hinder hotels from adopting formal EMS were identified and interpreted. They are: (1) lack of knowledge and skills; (2) lack of professional advice; (3) uncertainty of outcome; (4) certifiers/verifiers; (5) lack of resources; and (6) implementation and maintenance costs. Independent samples t-test and ANOVA analysis were also conducted to gain a better understanding of the significant differences in the identified six factors on the barriers to adopting and implementing EMS in the hotel industry among different hotel demographic variables. Implications of the findings are discussed, while recommendations are made to reduce the barriers inhibiting the adoption of EMS in the hotel industry.     

Exploring the relationship between employee creativity and job-related motivators in the Hong Kong hotel industry

The purpose of this research is to determine if there is any relationship between employee creativity and job-related motivators, using a case study of hotel employees in Hong Kong. From a sample of 983 employees, canonical correlation indicated there is a relationship between creativity and job-related motivators. Furthermore, the risk-taking dimension under creativity was found to be more correlated to the intrinsic job-related motivators. Intrinsic job-related motivators which include opportunity for advancement and development, loyalty to employees, appreciation and praise of work done, feelings of being involved, sympathetic help with personal problems and interesting work, are found to encourage the hotel employees’ risk-taking behavior. A “See-Saw” model is presented to show the relationship between the two opposing sides: intrinsic motivators and extrinsic motivators versus creativity and risk-taking factors.     

Calculating ROI for training in the lodging industry: Where is the bottom line?

The challenge of measuring the effectiveness and efficiency of training has long been a hurdle for human resource and training professionals in the lodging industry. The reporting of a department's financial performance is a basic expectation of leaders responsible for their share of operational goals of a property. The management of revenue, yield, assets, and total quality are all part of the mix; however, for many leaders in human resource and training experts in the lodging industry, justification for expenditures and financial performance expectations are rarely requested.     

Influences of consumer characteristics on fairness perceptions of revenue management pricing in the hotel industry

Fairness perceptions play an important role in customers’ behavior, and this study explores which consumer characteristics influence fairness perceptions of revenue management (RM) pricing in the hotel context. To examine such differentiating characteristics, the study conducts a logit analysis by comparing two groups: one group of customers who consider hotels’ RM practices to be fair and the other group considers the practices to be unfair. The findings provide an opportunity for hotel managers to identify customers’ particular characteristics that affect customer's perceptions of the fairness of hotels’ RM pricing practices.     

Competency analysis of top managers in the Taiwanese hotel industry

The purpose of this study was to identify top managers’ competencies in hotel unit leaders perceived to be most critical for career development, and using the Fuzzy Delphi and Analytic Hierarchy Process methods to determine perceptions of the importance of various competencies in different dimensions. This study uses snowball sampling methods to collect data from 25 hotel top managers and uses qualitative and quantitative surveys, including interviews, questionnaire review and a questionnaire survey. A two-stage research design is adopted to understand the differences in perceived competency requirements better. The analytical results demonstrate the required competencies of top managers in the hotel industry, and divide them into generic and technical dimensions, 18 competency domains, and 107 competency indices. The top three most important competency domains are “leadership,” “crisis management,” and “problem-solving.” The proposed management competency framework provides an important implication for educators, practitioners, and researchers.     

Levels of quality and environmental management in the hotel industry: Their joint influence on firm performance

Many studies have examined quality management and environmental management separately. This paper analysed the commitment to quality and environmental management at the same time, and their separate and joint effects on hotel performance. The empirical data were collected from a sample of 301 3-to-5-star Spanish hotels. A cluster analysis was carried out to identify the levels of commitment to quality and the environment. Then, ANOVA and regression analysis tested the quality and environmental commitment levels-performance link. Three levels of quality and environmental commitment have been identified. The findings showed that the commitment to quality and environmental practices influences hotel performance.     

Consumer reviews and the creation of booking transaction value: Lessons from the hotel industry

In recent years, much has been said about online consumer-generated feedback. Concern typically emerges regarding consumer decision-making as well as the preservation of an organization's image. Additionally, a company's financial performance can be affected by customer online ratings. The present study explores the impact of a hotel's rating and number of reviews on the value generated through online transactions. Through collaboration with consulting company Travel Click, the research team gathered a sample of 178 hotels representing various companies and brands within the United States. Research results demonstrate that TripAdvisor ratings as well as the number of reviews had positive relationship with the average size of each online booking transaction. The paper concludes with theoretical and practical implications.     

Aspects of service-dominant logic and its implications for tourism management: Examples from the hotel industry

This paper introduces the concept of service-dominant logic as a research paradigm in marketing management. It does so in the context of tourism management’s need to engage with wider debates within the mainstream management literature. Moreover it demonstrates the importance of service-dominant logic in uncovering the role played by co-production and co-creation in the tourism industry. These ideas are developed in detail through a case study of the UK hotel industry that draws on new empirical research undertaken by the authors.     

Effect of customer orientation and entrepreneurial orientation on innovativeness: Evidence from the hotel industry in Switzerland

While researchers have explored the relationship between customer orientation, entrepreneurship and innovativeness with business performance in different organizations, few such studies exist on the hotel industry. This current work investigates the potential influences of these variables on hotel industry performance. Data for this study was collected through personal questionnaires collected from 156 hotel managers and owners from German and French speaking cantons located in Switzerland in order to examine the interrelation between innovativeness, customer orientation, entrepreneurship and service business performance dimensions (i.e., profit goal achievement, sales goal achievement and ROI achievement). The findings support aspects of prior research, but also provide some new insights by exploring customer orientation and innovativeness simultaneously and revealing how these factors impact upon the performance of the Swiss hotel industry. In the light of existing literature, limitations and future research directions are subsequently addressed.