Exotic Reservations – Low Price Guarantees

The increase in the volume of internet online bookings has had a major impact on distribution channels in the hotel industry. The popularity of such services stems from the consumers\u27 desire to obtain the lowest rate within their desired market segment. One possible cure is to offer the best rate guarantee. We show that current rate guarantees are essentially worthless to consumers; and demonstrate how a hotel company can structure a best rate guarantee that would provide value to consumers. In addition, we show, using a well-established exotic option pricing formula, how to price this best rate guarantee so that consumers would be willing to pay for the option

Pricing in the Hospitality Industry: An Implicit Markets Approach

The authors apply economic theory to an analysis of industry pricing. Data from a cross-section of San Francisco hotels is used to estimate the implicit prices of common hotel amenities, and a procedure for using these prices to estimate consumer demands for the attributes is outlined. The authors then suggest implications for hotel decision makers. While the results presented here should not be generalized to other markets, the methodology is easily adapted to other geographic areas

Giraffes, Institutions and Neglected Firms

Certain securities - in particular, those of small capitalization firms - are generally unsuited to the investment requirements of financial institutions, hence attract minimal coverage by analysts. As a result, these securities may offer a premium as a compensation for associated information deficiencies and/or because pricing inefficiencies exist as a result of the lack of information. An analysis of 510 firms over a 10-year period indicates that the shares of those firms neglected by institutions outperform significantly the shares of firms widely held by institutions. The superior performance persists over and above any small firm effect ; that is, both small and medium-sized neglected firms exhibit superior performance. The neglected firm effect suggests some potentially rewarding investment strategies for individuals and institutions alike

Analyst Forecasts and Price/Earnings Ratios

[Excerpt] Security valuation techniques have become increasingly sophisticated, as evidenced by advances in option pricing theory and Arbitrage Pricing Theory (APT). Despite the availability of these paradigms, the price/earnings (P/E) approach to security valuation has maintained its popularity among practicing security analysts. Much of this lasting popularity can be attributed to the apparent simplicity of the P/E approach and the difficulties inherent in implementing complex valuation models. To implement the P/E approach, analysts must estimate the appropriate P/E multiple, which typically requires the development of a model. Unfortunately, most of the P/E models that have been developed use ad hoc empirical tests and historical data. One notable exception is a study by Cragg and Malkiel, which tested a theoretical P/E model using analysts\u27 forecasts for a nonrandom sample of 175 large firms. This note extends the work of Cragg and Malkiel in two ways. First, it is not restricted to large firms; all firms with complete data are included in the empirical tests. Second, the model includes some factors not considered by other researchers

The Mixed Motive Instruction in Employment Discrimination Cases: What Employers Need to Know

In litigation regarding employment discrimination, the burden of establishing proof has continued to shift. As a result, employers and legal counsel need to be aware of the status of what they and human resources professionals should consider when an employee alleges that the employer has violated federal discrimination statutes. The original standard of proof required the plaintiff to establish that the employer discriminated against that person. Many cases still involve that approach, giving the plaintiff the burden of creating prima facie case. However, another line of rulings by the U.S. Supreme Court added an alternative method for addressing discrimination litigation, known as the mixed motive approach. The two-prong mixed motive case requires the employee to demonstrate that a protected characteristic (e.g., race, sex, national origin) was a substantial factor in an employer\u27s adverse action. If that is established, the employer then has the burden of proving that the decision would have been made in any event, regardless of the employee\u27s protected characteristic. As a practical matter, employers facing litigation of this type must consider whether and how to defend such a case. Even a win can be expensive, because in cases where there is a divided decision, the employer must pay the plaintiff\u27s attorney fees and court costs, as well as its own. Moreover, since the Civil Rights Act of 1991 places discrimination cases in front of a jury, a divided decision is seemingly more likely. Although that presumably gives both sides a win, it still means a large expense for the employer

Business Cycle and Asset Valuation in the Gaming Industry

This study values takeover targets in the gaming industry and finds that privately held takeover targets command lower valuations than publicly traded firms. On average valuation multiples are 46% lower for private targets relative to public firms. This finding has significant implications for owners of privately held gaming companies who may consider a takeover as an option to maximize shareholder value. The study examines the effect of recessions and expansions on valuation. The discount of private targets relative to public targets is present at all stages of the business cycle. Acquisition targets receive lower valuations in recessions and the relative discount for private gaming firms deepens further in recessions. Jointly, the results suggest that recessions have an important impact on the market for corporate control in the gaming industry

Economic and Capital Market Antecedents of Venture Capital Commitments (1960-2010)

Using vector autoregression technique, we examine the interrelation between venture capital flows, economic development, capital market fund-raising activities, and capital market valuation, based on annual data of the United States over the past half-century. We find that venture capital commitments appear to be correlated with GDP and capital market valuation. While capital market fund-raising activities (Initial Public Offerings and Seasoned Equity Offerings) are also correlated with venture capital flows, these effects are subsumed by GDP, indicating that the overall economy drives both venture capital flows and capital market financing activities. Analyses from impulse response functions suggest that shocks to GDP have a permanent effect on venture capital flows, while the impact of capital market valuation (Standard & Poor 500 returns) on venture capital flows is rather short lived. Overall, both economy-wide development and financial market fluctuations seem to impact venture capital flows

The impact of land use/land cover scale on modelling urban ecosystem services

Context Urbanisation places increasing stress on ecosystem services; however existing methods and data for testing relationships between service delivery and urban landscapes remain imprecise and uncertain. Unknown impacts of scale are among several factors that complicate research. This study models ecosystem services in the urban area comprising the towns of Milton Keynes, Bedford and Luton which together represent a wide range of the urban forms present in the UK. Objectives The objectives of this study were to test (1) the sensitivity of ecosystem service model outputs to the spatial resolution of input data, and (2) whether any resultant scale dependency is constant across different ecosystem services and model approaches (e.g. stock- versus flow-based). Methods Carbon storage, sediment erosion, and pollination were modelled with the InVEST framework using input data representative of common coarse (25 m) and fine (5 m) spatial resolutions. Results Fine scale analysis generated higher estimates of total carbon storage (9.32 vs. 7.17 kg m−2) and much lower potential sediment erosion estimates (6.4 vs. 18.1 Mg km−2 year−1) than analyses conducted at coarser resolutions; however coarse-scale analysis estimated more abundant pollination service provision. Conclusions Scale sensitivities depend on the type of service being modelled; stock estimates (e.g. carbon storage) are most sensitive to aggregation across scales, dynamic flow models (e.g. sediment erosion) are most sensitive to spatial resolution, and ecological process models involving both stocks and dynamics (e.g. pollination) are sensitive to both. Care must be taken to select model data appropriate to the scale of inquiry

Changing Bee and Hoverfly Pollinator Assemblages along an Urban-Rural Gradient

The potential for reduced pollination ecosystem service due to global declines of bees and other pollinators is cause for considerable concern. Habitat degradation, destruction and fragmentation due to agricultural intensification have historically been the main causes of this pollinator decline. However, despite increasing and accelerating levels of global urbanization, very little research has investigated the effects of urbanization on pollinator assemblages. We assessed changes in the diversity, abundance and species composition of bee and hoverfly pollinator assemblages in urban, suburban, and rural sites across a UK city.Bees and hoverflies were trapped and netted at 24 sites of similar habitat character (churchyards and cemeteries) that varied in position along a gradient of urbanization. Local habitat quality (altitude, shelter from wind, diversity and abundance of flowers), and the broader-scale degree of urbanization (e.g. percentage of built landscape and gardens within 100 m, 250 m, 500 m, 1 km, and 2.5 km of the site) were assessed for each study site. The diversity and abundance of pollinators were both significantly negatively associated with higher levels of urbanization. Assemblage composition changed along the urbanization gradient with some species positively associated with urban and suburban land-use, but more species negatively so. Pollinator assemblages were positively affected by good site habitat quality, in particular the availability of flowering plants.Our results show that urban areas can support diverse pollinator assemblages, but that this capacity is strongly affected by local habitat quality. Nonetheless, in both urban and suburban areas of the city the assemblages had fewer individuals and lower diversity than similar rural habitats. The unique development histories of different urban areas, and the difficulty of assessing mobile pollinator assemblages in just part of their range, mean that complementary studies in different cities and urban habitats are required to discover if these findings are more widely applicable