Hotel investments, which have far-reaching impact on hotel companies' long term financial health, will continue to be the primary mode for hotel companies' survival and growth. However, top management has been facing a changing industry and investment community to which they are required to adapt. Consequently, the old fashioned gut-feeling types of decision making are no longer appropriate for sound hotel investments. It is the primary objective of this study to develop a model for hotel investment risk assessment and appropriate cost of capital estimation in the middle-price and economy hotel segments for the investment's capital budgeting purposes. The hotel investment risk assessment and cost of capital estimation model research was conducted using the focus group interview, the Delphi Technique, and the case study. As exploratory research, the focus group interview was conducted with the participation of hotel executives and general managers, hotel owners, and bank lenders from the Virginia area. Key investment risk factors were identified from the opinions of this panel, which represented different perspectives and needs. The summary findings laid out the foundation of the Delphi Technique survey_ The Delphi survey was conducted among hotel general managers, hotel executives, and hotel owners within three hotel chains in Virginia, Maryland and Delaware. They consisted of a professional panel of 19 members. The first task accomplished by the panel was to further validate the key risk factor profile developed by the focus group interview. The second task was to rate the level of influence of the identified factors using a five point likert-type scale (5=very influential, 1 = little influential). Three rounds of the survey allowed the panel members to achieve a consensus on the issues. A total of 36 hotel key investment risk factors in the middle-priced and economy segments were agreed to be included in the investment risk assessment framework. In addition, a ranking of all factors was produced based on each factor's importance and influence level. All the factors received a higher than average (rank scale 3) ranking. The empirical finding provided a valuable framework for the subjective risk assessment in the cost of capital estimation model. / Master of Science

The central focus of this study is to provide an empirical explanation regarding the efficacy of the managerial expectation formation process as it contributes to the understanding of discounting room rates as a rational strategic phenomenon in the lodging industry. The study assesses the nature of the relationship between discounting hotel room rates and hotel financial performance when considering the non-stationary conditions of a time series data set. The study was rooted in an operational based perspective with regard to the challenges presented by the perishable nature of room night sales - the loss of which may impact a manager’s fundamental responsibility: to generate maximum revenue from the existing hotel room capacity. Of critical importance to this study is whether the incremental use of discounting room rates could work to correct for temporal periods of decreased demand and thus increase shortterm hotel financial performance. There is limited research regarding the empirical relationship between discounting room rates and hotel financial performance, as well as the internal process that a hotel manager uses to determine an accurate room rate that corresponds to seasonal lodging market demand conditions. An empirical foundation for this practice is lacking in the extant hospitality literature. Literature reveals that, although the lodging industry commonly incorporates discounting as a pricing strategy, recent research implies that high occupancy levels at discounted room rates do not necessarily lead to an increase in hotel financial performance. The contrast then between what is practiced and the recommendations from pricing strategy studies has led to lack of consistent agreement in current lodging literature regarding how discounting of hotel room rates relates to hotel financial performance. This study is at the forefront in its use of the methodological procedures that support a theoretical framework iv capable of providing explanations regarding managers’ internal process of discounting as an effective pricing strategy that could compensate for times of decreased room demand. An econometric case study research design was used in conjunction with a cointegration analysis and an error correction model (none of which are otherwise appropriated as assessment tools in the lodging industry). These applications provide a means to understand the expectation formation process of managers’ room price setting strategies. They also assess the empirical nature of the relationship between the variables by accounting for the erratic variations of room demand over time as induced by random error fluctuations. A non-deterministic system was assumed and supported through the analysis of the stationarity conditions of the time series data set under investigation. The distinguishing characteristics of a dynamic system that are recognized as traits of the lodging industry are further supported by the theoretical framework of the rational expectations theory and the cobweb model. The results of the study are based on secondary financial data sets that were provided by a midscale independently owned leisure hotel in the Orlando, FL market and that is located on Walt Disney World property. The results of this study delineate from the current normative economic recommendation based on descriptive research that claims discounting hotel room rates does not increase hotel financial performance. The current study does not draw an association between the variables from the presupposition of a deterministic marketplace, nor does it recommend to managers to hold a constant average daily rate over time. Based on the findings of the statistical procedures performed and the theoretical framework, the study contends that previous research may have incorrectly modeled room price expectations; elected to use inappropriate statistical tests; and, therefore, may have entertained misleading conclusions regarding the relationship between discounting of hotel room rates and hotel financial performance. v Through use of an error correction model, the major findings of this study imply several concepts: that residuals may be treated as a variable within the study’s model in order to better understand the short run dynamics that may lead to equilibrium correcting room price positions over the long run of time; that discounting room rates works in the short run; and, that managers use a rational price setting strategy to set future room rates. All of the aforementioned concepts fall within accordance of the rational expectations theory. The study concludes that while the constant room rate adjustments observed in the lodging industry may display what appears to be a random structure that deviates from the expected systematic, or stable, financial performance of a hotel over time, the deviations in performance are actually a rhythmic synthesized process of market information from past and current times. Hence, hotel managers appear to be using a backward looking model to forwardly project optimal room rates to match uncertain consumer demand. The empirical assessment employed in this study supports this determination.

The major purpose of this study was to develop a model to analyze designated variables inherent in hotel/motel operations and to determine their interrelationships and effects on profitability measures. An additional purpose was to determine the regression equations for predicting future profitability in the hotels/motels used in this study. A final analysis conducted in this study was a comparison of highly profitable properties with marginally profitable or losing properties to determine which independent variables' means were significantly different. The four profitability measures, expressed as ratios, used in this study were: (a) Consolidated Operating Margin, (b) Consolidated Return on Assets, (c) Rooms Department Operating Margin, and (d) Restaurant Operating Margin. Twenty-six variables were hypothesized as predicting or having a significant effect on profitability. These included: (a) Room Rate, (b) Occupancy Rate, (c) Marketshare Percentage, (d) Administrative and General Expense, (e) Labor Cost for the Rooms Department, (f) Rooms Department Advertising, (g) Property Tax, (h) Restaurant Total Expense, (i) Restaurant Other Revenue, (j) Food Cost, (k) Beverage Cost, (1) Food and Beverage Labor Cost, (m) Food and Beverage Advertising, (n) Room Sales as a Percent of Consolidated Sales, (o) Depreciation, (p) Interest Expense, (q) Unemployment Percentage, (r) Chain Affiliation, (s) Location of the Property (highway, center city, suburban and airport), (t) Age of the Property, and (u) Properties that were Renovated Compared to Properties that were not Renovated. The remaining variables were combinations of or modifications on the previously mentioned variables. Data analyses were based on information collected in 40 hotels/motels in Virginia, Maryland, Pennsylvania, and South Carolina. All operations selected for this study were mid-priced hotels/motels affiliated with a national hotel chain. The data were collected from fiscal year 1982 and fiscal year 1983 accounting information and public records. Occupancy Rate, Rooms Department Labor Cost, Administrative and General Expense, Room Sales as a percentage of Total Sales and Food Cost proved to have substantial influence on profit. These variables had high correlations with the profitability measures, most frequently fit the regression models, and showed significant differences between highly profitable operations and the marginally profitable or losing operations. / Ph. D.

published_or_final_version / Business Administration / Master / Master of Business Administration

No description available.

Under the background of the perceived supply inelasticity of hotel property, the study seeks to examine the role of the planning control system in this perceived supply inelasticity through analysing the responsiveness of the planning control system to hotel property development. Based on the premises that a responsive planning system should(1) allocate land in right amount and good quality, (2) provide certainty to developers as to what is permissible, and (3) provide flexibility under changing market conditions or for developers to argue for what they considered as the best results, it is argued that, with a few exception, individual planning policies are largely responsive to hotel development for it has given, and has been gradually giving more, certainty and flexibility to development initiatives including those opting for hotels development. Acknowledging that responsiveness of policies may vary as they are interpreted and applied in practice, the study proceed to analysis the responsiveness of planning control system to hotel development in practice. It is found that, in the realm of site attributes, the planning control system generally shows no particular preference on plot size and locations when releasing land for hotel development. In the realm of development intensity, the planning control system has transformed gradually from an uncertain yet rigid system to one with good mix of certainty and flexibility that are desired by the hotel developers. In the realm of technical matters like internal transport facilities provision, flexibility is available albeit fixed standards are stipulated in the HKPSG. Given all these, it is concluded that the planning control system is responsive to hotel development. And it is therefore contended that it is not likely for the planning control system to constitute a major cause for the supply inelasticity of hotel property. It is further suggested that it is the trend planning practices for hotel development that may be the root cause of the supply inelasticity on one hand, and the land use incompatibility issue as raised by critics on the other. / published_or_final_version / Urban Planning and Design / Master / Master of Science in Urban Planning

No description available.

No description available.

Thesis (PhD) -- University of South Australia, 1999

Thesis (MIHM) -- Auckland University of Technology, 2004. / Also held in print (62 leaves, 30 cm.) in Wellesley Theses Collection (T 658.314 THE)