Lodging Industry Trends – Today and Tomorrow

REFEREED ARTICLES

 Bond Yields in the Hospitality Industry

             Hyun Kyung Chatfield and Robert E. Chatfield

This paper examines whether there are any systematic differences in the cost of debt relative to rating standards between firms in the hospitality industry and firms in other industries.  It also examines the impact of make-whole call provisions upon the cost of debt.  The make-whole call provision is a relatively new innovation in the corporate bond market.  We do find some evidence of a positive hospitality industry impact upon bond yields.  Additionally, the make-whole call provision appears to be valued by investors, reducing the investor loss from early bond redemption in a period of declining interest rates.

 Hotel Real Estate in a Property Investment Portfolio: An Examination of Results from 1992 to 2001

             Gabriel A. Petersen, A.J.Singh and Atul Sheel

This paper analyses the performance of five real estate sub-sectors (office, retail, industrial, apartment and hotel) over a ten-year (historical) period, 1992 to 2001, in order to assess the impact the hotel sub-sector would have when constructing a multi-property investment portfolio. The research was built on the foundation of modern portfolio theory and data were analyzed using correlation analysis, Sharpe Ratio and a portfolio simulation model.  Research results suggest that at least during the period 1992 to 2001, the hotel sub-sector outperformed all other sub sectors in terms of total returns and also produced the second best risk-adjusted returns. The results also suggest that the inclusion of hotels in the real estate investment portfolio had a significant impact on the efficient frontier offering several 'higher risk' - 'higher return' target options for an investor.  As such the significance of the hotel sub-sector within a multi-property real estate investment portfolio is better understood.

 The Evaluation of Forecasting Methods at an Institutional Foodservice Dining Facility

             Kisang Ryu and Alfonso Sanchez

 The purpose of this study was to identify the most appropriate method of forecasting meal counts for an institutional foodservice facility. The forecasting methods to be analyzed were the following: naïve model 1, 2, and 3; moving average, double moving average, simple exponential smoothing, double exponential smoothing, Holt’s, and Winters’ methods; linear and multiple regressions. The accuracy of the forecasting methods was measured using mean squared deviation, mean squared error, mean percentage error, mean absolute percentage error, root mean squared error, and Theil’s U- statistic. The result of this study showed that multiple regression was the most accurate forecasting method, but naïve method 2 was selected as the most appropriate forecasting method due to its high accuracy and simplicity.

Hotel Franchise Termination: Preliminary Injunctions Protect Unlawful Trademark Use

Robert H. Wilson

Hotel franchise companies license the use of their trademarks, name, logo, and operating procedures to their franchisees in return for the ongoing payment of franchise fees. When a hotel owner fails to pay money owed for franchise fees or fails to adhere to the operational or other requirements, the hotel franchise company will be forced to terminate the franchise. The Lanham Act allows protection to a hotel company for the property rights that exist in their trademarks, logo, and name by allowing for the registration of those marks and by providing for the use of preliminary injunctions granted by Federal Courts to stop the unlawful use of valid trademarks. This paper explains how hotels can make use of such tools to protect their bottom line.

 INVITED ARTICLE

 AHFME Academic Member 2001 Total Annual Earnings Survey

             Raymond S. Schmidgall

 This study was conducted to determine the 2001 annual earnings of hospitality financial management educators.  Fifty-two percent of AHFME’s members affiliated with educational institutions responded.  Annual base salaries ranged from $30,000 to $170,000.  The lowest-paid member is an instructor while the highest-paid member is a full professor.  Most respondents supplement their base salaries by both teaching during summer school and consulting.  The total annual earnings of members ranged from $30,000 to $220,000.  Hospitality financial management educators appear to be more highly compensated than hospitality industry financial executives.

 VIEWPOINT

 The Impact Of Cyprus European Union (EU) Integration On The Financing Of Investments In The Tourism Sector of Northern Cyprus

             Okan Safakli

 This paper examines the issue of tourism development and financing of investments in the tourism sector of Northern Cyprus. It discusses the current model for tourism financing in Northern Cyprus and analyzes possible implications on the efficiency of this model due to membership in the European Union (EU). As such, the process of tourism financing in Northern Cyprus, its constraints and opportunities are better understood.

 Financial Performance Related to Accounting Treatments at Hotels With Breakfast Included: A Case Analysis

             Emmett Steed, Richard G. Brody and Zheng Gu

 This viewpoint addresses accounting treatments that potentially affect departmental performance evaluation at full-service hotels including breakfast in room rates. The authors contend that important inter department conflicts  arising from accounting treatments in such properties  could be minimized if handled appropriately.

 BOOK REVIEWS

 Guilding, Chris. Financial management for Hospitality Decision Makers

 Moncarz, Elisa S. and Portocarrero, N. J. Accounting for the Hospitality Industry

 Jagels, margin G. and Coltman, Michael M. Hospitality Management Accounting

 ABSTRACTS OF PRESENTATIONS AT THE 2002 ANNUAL AHFME RESEARCH SYMPOSIUM

 9/11 and its Effects on the Rates of Return and Risk in the Hospitality Industry: An Event Study Approach

            Arun Jai Prakash, Elisa Moncarz and Chih-Chen Lee

 Linking Cost-Volume-Profit Analysis with Goal Analysis in the Curriculum Using Spreadsheet Applications

             Lea R. Dopson

 Market Model: Estimation Problems and its Uses With Special Reference to the Hospitality Industry

            Arun Jai Prakash, Elisa Moncarz and Maria Christina Valesquez

 Information Asymmetry Around Hospitality Merger Announcements