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.     

Environmental scanning, industry structure and strategy making: concepts and research in the hospitality industry

This paper presents a model for strategic analysis in the restaurant industry. A review of the evolution of environmental scanning and the concept of industry structure is offered. These concepts as well as the results of research into the environmental scanning behavior of hospitality firms are synthesized into a proposed model for corporate environmental scanning activities.     

The use of lodging ratios in tourism

This paper presents an analysis of the lodging industry in Victoria, Canada, using standard accounting procedures. It provides detailed information on the supply side of the tourist industry. Meaningful categories were derived by categorizing the sample of hotels and motels into four groups according to their ratios of food and beverage sales to room sales rather the conventional aggregations used by the lodging industry. Cost-volume-profit (C-V-P) analysis was used to compare the break-even charts of the four groups. Information on risk was also obtained by an extension of the analysis using probabilistic C-V-P measures. It is concluded that information at this level of aggregation is important to decision-makers involved in overall tourism planning as well as to management of individual facilities.     

Board structure and CEO compensation: Evidence from U.S. lodging industry

Using a sample of U.S. lodging firms, this paper examines the relationship between board of director characteristics and chief executive officer (CEO) compensation. Previous research shows that larger boards are detrimental to the effectiveness of the board of directors and deteriorate the control imposed on CEO actions and pay. Board independence is also suggested as an important quality to emphasize the control on the CEO. We propose that U.S. lodging firms’ board of directors provide a nice setting to investigate the effects of size and independence on CEO compensation level. Our findings suggest that CEO compensation is not related to board size, and positively related to proportion of the outside board members. These findings are contrary to the findings of previous studies. Our findings may provide significant insights to lodging firms’ board of directors to structure efficient compensation packages.     

COVID-19 impacts,coping strategies,and management reflection: A lodging industry case

The COVID-19 pandemic has hit the global tourism and hospitality industry with drastic results. Hotels have been experiencing unprecedented challenges, leaving many to temporarily or permanently closed. Employing a case study approach supported by both quantitative and qualitative analysis, this study examined how two hotels in Oklahoma City had coped with challenges presented by the COVID-19 pandemic, from day to day operations, health and safety measures to marketing, human resources and cost-saving strategies. The study contributes to the tourism crisis and disaster literature by providing micro-level coping strategies, a literature gap that needs to be addressed, particularly under the current pandemic.     

Toward a resolution of the cost of equity conundrum in the lodging industry: a conceptual framework

The firm value estimate is derived from accounting and finance practices that focus on physical assets as opposed to intangible assets (Arthur Andersen Hospitality Leisure Executive Rep. 5 (1998) 2). The cost of equity estimation models used in firm valuation and capital investment decisions fall short of tapping important constructs to firm value, especially the intangible ones. The purpose of this study is to assess the present cost of equity capital determination models and provide a view of their relevancy for the lodging industry while simultaneously attempting to propose new options to meet the valuation and capital budgeting needs of the lodging 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.     

Employees' perceived job performance,organizational identification,and pro-environmental behaviors in the hotel industry

Employees' engagement in pro-environmental behaviors (PEBs) is crucial for greening hotels and improving hotel performance. This paper argues that we can explore employees' PEB motivations from a positive externality/spillover perspective because such voluntary behaviors benefit actors other than the employees, namely, the hotels that employ them and the surrounding natural environment. Accordingly, compensation and internalization could motivate employees' PEBs. This paper attempts to advance research on internalization by focusing on the oneness between employees and organizations and by proposing that organizational identification (OI) is an essential predictor of employees' PEBs and can be improved by increasing their perceived job performance (PJP). Additionally, this paper argues that PJP can affect employees' PEBs through OI. In the context of the positivism research philosophy, the current study utilized a survey method to collect data from employees working in Chinese hotels and performed ordinary least squares (OLS) regression analysis to test the proposed hypotheses, which were all supported empirically.     

The relationship between board diversity and firm performance in the lodging industry: The moderating role of internationalization

Following the emphasis on board diversity and its roles on firm performance, an examination on the relationship between board diversity and firm performance in the lodging industry is conducted. Further, this study employs internationalization, a moderator, to more comprehensively investigate the board diversity-firm performance relationship. This study found that gender diversity shows a positive and significant effect on firm performance while age diversity has an insignificant effect on firm performance. Regarding the moderating effect of internationalization, the degree of internationalization significantly magnifies the effect of gender diversity on firm performance but insignificantly moderates the effect of age diversity on firm performance. This study attempts to contribute to the hospitality and tourism literature by examining the topic that has been rarely dealt with and provide practical guidelines for stakeholders of a lodging firm especially when selecting board members.     

Sustainable urban tourism success factors and the economic performance of small tourism enterprises

The aim of this study is to introduce the relationship between sustainable urban tourism success factors and the economic performance of small tourism enterprises (STEs). The related data was obtained from 330 STEs business owners/managers in Eskisehir (Turkey). To determine the dimensions Exploratory Factor Analysis was performed and Confirmatory Factor Analysis was used for verifying these dimensions. Structural Equation Modelling was applied in order to introduce the relation which is foreseen. As a result of the analysis, seven dimensions of urban tourism success factors and two dimensions of the economic performance of STEs have been determined and a significant relation was found between them. These findings provide an insight to literature and new directions and suggestions for local governments, regional marketing organizations and business managers on how tourism development and sustainability can be achieved in urban areas.     

Capital structure in the hospitality industry: The role of the asset-light and fee-oriented strategy

An asset-light and fee-oriented strategy (ALFO), which reduces risk and facilitates firm growth with minimum capital investment, has increasingly gained attention from industry practitioners and academic scholars alike, especially in the service sector like the hospitality industry. We empirically examine how ALFO is employed and how it is related to the capital structure, i.e. the proportion of debt and equity financing, in hospitality firms. Using a sample of 982 firm-year observations over the period 2002–2016, we find that ALFO is widely used by the hospitality industry, and as expected, the fee-income ratio and the degree of franchising have increased, while asset tangibility and capital intensity have decreased. Interestingly, although ALFO is positively related to long-term debt ratios of hospitality firms, our sub-sector analyses indicate that the relationship is only significant in the restaurant sector and not in the hotel sector. Our study contributes to the literature by identifying an important industry-specific variable that affects the capital structure of hospitality firms.     

Diversification strategy and financial performance in the Taiwanese hotel industry

This study categorized 25 highly market-diversified international tourist hotels into two sub-groups, based on the highest proportion of hotel revenue generated either by (1) food and beverage (F&B) services; or by (2) room services. We investigated the differences in financial performance of these two sub-groups and concluded that hotels with a major proportion of the revenue from F&B services obtained higher growth but unstable profit margins, compared to another group of hotels with profit mainly from room service. Our study results can serve as a valuable reference for hospitality industries to evaluate the tradeoff between investing more resources in room or F& B service, especially at markets where F&B is highly valued.     

资本深化、全要素生产率与中国住宿餐饮业增长

本文在中国住宿餐饮业增长动力分解方程式的基础上,对中国住宿餐饮业发展过程中的资本深化、全要素生产率进行了实证研究,得出了3个结论:第一,资本深化是目前中国住宿餐饮业增长的主要动力,而劳动投入的下滑对住宿餐饮业增长产生了负面影响;第二,中国住宿餐饮业的生产率几乎不存在要素偏向,不是纯粹资本增强型的;第三,1991年以来中国住宿餐饮业的技术效率一直没有增进,全要素生产率增长得益于技术进步.基于以上结论,本文认为有效劳动投入的增长和技术效率的提高,是中国住宿餐饮业增长需要解决的两个主要问题.     

The effect of environment risk,corporate strategy,and capital structure on firm performance: An empirical investigation of restaurant firms

The co-alignment process has been used in hospitality strategy as a framework to explain strategic orientation of firms. In this study, using a sample from the US restaurant industry, the authors test the simultaneous impact of surrogates from constructs identified as part of the co-alignment model, i.e. environment, strategy, and structure, on firm performance. Results indicate that a significant variance in firm performance is explained by the variables from the foregoing constructs of the co-alignment model. The robustness of this study provides restaurant firms’ managers a basis to evaluate their firms’ strategic orientation vis-à-vis its impact on firm performance.     

Market Orientation,Strategy and Revenue Growth in the Turkish Hotel Industry

This empirical analysis of hotel properties in south-western Turkey draws on the market orientation, strategy, and capabilities literature to highlight the benefits of a differentiation strategy and customer-value focus for competitors in this industry. Relationship management and organizational resource management are key drivers of sales growth in this industry, and hotel operators facing high competitive intensity are particularly encouraged to develop these capabilities and to adopt a differentiation strategy instead of resorting to price cutting and other pricing and promotional tactics to grow revenues. Notable opportunities for future research include examining relationships between market orientation, customer satisfaction, and employee satisfaction in the Turkish hotel industry.     

An examination of executive compensation in the restaurant industry

The purpose of this empirical study is to examine executive compensation in the restaurant industry. The effects of a set of accounting-based performance measures, market-based performance measures, and executive-related factors on the compensations of firm CEOs, other senior executive managers, and board members were examined. Drawn from 16 consecutive years of data and a sample of over 2200 observations from restaurant companies, the findings revealed that determinants of equity based compensation vary by different types of executives. In addition, this study supports the notion that executive compensation in the restaurant industry is determined not only by firm performance measures but also by executive-related characteristics such as tenure.     

Corporate social responsibility reporting by the global hotel industry: Commitment,initiatives and performance

The current study evaluates corporate social responsibility (CSR) reporting practice among the largest hotel companies in the world. Based on the content analysis of websites and reports published online by the top 150 hotel companies in the world in summer 2010, it identifies the communication methods used by hotel companies as well as the scope of reported information. Specifically, it demonstrates that while a large number of companies report commitment to CSR goals, much smaller number of them provide details of specific initiatives undertaken to contribute to these goals and even less of them report actual performance achieved. The study also identifies a number of challenges which make it very difficult to meaningfully compare performance of the hotel groups that do report it, including issues such as different methodologies applied, different measures used and lack of clarity with respect to the scope of reporting.     

Revisit to the determinants of capital structure: A comparison between lodging firms and software firms

This study validates the contradiction between capital structure theories and previous empirical studies, and it further identifies lodging firms’ unique leverage behavior through a comparison to software firms, using a generalized least squares analysis. This study also explores the joint effects of key financial leverage determinants. The findings indicate that fixed assets, growth opportunities, and the joint effect of these two variables are the significant long-term debt determinants of the lodging industry. The analysis of the joint effect also suggests that fixed assets and growth opportunities affect each other's relationship with long-term debt usage. With the findings on lodging firms’ unique financing rationale, authors hope to provide useful information for corporate financial planners and lending institutions regarding debt-financing behavior.     

An analysis of the relationship between market orientation and business performance in the hotel industry

The purpose of this study was to conduct an investigation into the link between market orientation and business performance in the hotel industry. Data were generated from 63 hotels in Hong Kong. The findings indicated that market orientation is positively and significantly associated with the marketing performance and financial performance of a hotel. The implications of the findings are discussed and the limitations of the study as well as future research directions are addressed.