Recent Trends in Lodging and Casino Firms

REFEREED ARTICLES

The Long-Run Equilibrium Relationship between Economic Activity and Hotel Stock Prices

Ming-Hsiang Chen and Woo Gon Kim

 This study is an examination of long-run equilibrium relationship between economic activity and hotel stock prices. Based on the results of cointegration analysis, a hotel stock return model is formulated with the error correction term. The model shows that changes in industrial production, changes in money supply and the error correction term are significant influences on hotel stock returns. A negative sign of the error correction term indicates that although the cointegrating relationship experiences the short-run deviations, the system tends to revert to the equilibrium relationship.

 A Logistic Regression Analysis for Predicting Bankruptcy in the Hospitality Industry

             Hyunjoon Kim And Zheng Gu

This study uses the financial data of 16 U.S. hospitality firms that went bankrupt between 1999 and 2004 and 16 non-bankrupt matching firms, to estimate logit models for predicting bankruptcy up to 2 years in advance. Results show that logit models resulting from forward stepwise selection procedures could predict 91% of bankruptcy cases one year in advance, and 84% of bankruptcy cases 2 years earlier. The estimated models are suggestive of the fact that a hospitality firm is more likely to go bankrupt if it has lower operating cash flows and higher total liabilities. The models also suggest that a prudent sales growth strategy accompanied by tighter control of operating expenses and less debt financing can help enhance a firm’s ability to meet its financial obligations and thereby reduce bankruptcy risk.

 A Re-Examination of Key managerial Accounting Skills for Lodging Industry Managers

James W. Damitio and Raymond S. Schmidgall 

This study uses survey research to reexamine salient managerial accounting skills for managers in the lodging industry and compares its results to the findings of Damitio and Schmidgall (1991). Results of this research support clearly suggest that managerial accounting skills are extremely useful to lodging managers in performing their duties. Consistent with the findings of Damitio and Schmidgall (1991), this study also shows significant agreement between lodging controllers and lodging managers as to the importance of these skills. As such the nature and importance of managerial accounting skills relevant for successful lodging operations are better understood. 

A Review of Restaurant Valuation Literature – The Pre-2005 Perspective 

Michael C. Dalbor, Andrew H. Feinstein and Zhenxing Mao

This research examines pre 2005 restaurant valuation literature in an effort to identify unexplored areas in this emerging field. Although much has been written regarding valuation in general, there has been very little appraisal literature focusing specifically on  restaurants. Of the research that has been conducted, there has been some controversy about whether the appropriate value of a restaurant is a market value or a going concern value. We also explore the continuing usage of “rules of thumb” in restaurant valuation. Although these rules are often based in theory as well as practice, their breadth can severely limit their usefulness.  Accordingly, we examine the prevalence of rule-of-thumb usage in the literature and hope that this may motivate academic researchers to find evidence of the relative accuracy of these informal tools.

  INVITED ARTICLE 

AHFME Academic Member 2004 Total Annual Earnings Survey 

Raymond S. Schmidgall 

This study was conducted to determine the 2004 annual earnings of hospitality financial management educators. Sixty percent of AHFME’s members affiliated with educational institutions responded.  Annual base salaries ranged from $45,000 to $192,000.  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 $45,000 to $254,600.  Hospitality financial management educators appear to be more highly compensated than the average college professor.

VIEWPOINT

An Examination of Intellectual Capital in the Accommodation Sector of Antalya Region, Turkey                                                                                    

Volkan ALTINTAŞ, Nilüfer TETİK, Burcu DEMİREL UTKU 

This study uses survey research to examine the nature and role of intellectual capital  in the lodging or accommodation sector of the Antalya Region, Turkey. At the onset, The concept of intellectual capital is discussed in detail. Thereafter, survey research data from 5-star hotels and first class holiday villages in Antalya, a region that hosts over 30% of Turkey’s lodging firms, were examined. As such the nature and importance of intellectual capital for wealth creation in the lodging or accommodation sector is better understood.

  BOOK REVIEWS

 Andrew, William P., Damitio, James W. and Schmidgall, Raymond S. Financial Management for the Hospitality Industry.