Entrepreneur\u27s Dilemma: Hotel Investments in Emerging Markets

Estimating the required rate of return for hotel properties is a daunting task because a lodging property is considered a hybrid between a real estate asset, and a revenue-generating enterprise affiliated with a hotel brand. Computing the expected rate of return for a hotel becomes even more complicated when a third party foreign investor/entrepreneur is the one performing the computation for an investment hotel in an emerging country. This clinical case illustrates the challenges surrounding the estimation of a project’s cost of equity in the multinational hotel industry. The results reveal that estimating cost of equity in emerging markets for hotel investments continues to be a conundrum. Future investors should make multiple adjustments and use several models when making their capital investment decisions

Who Shook Big Mac?: Panera Bread Co.

The authors identify the firm-specific core competencies that Panera Bread has relied on to achieve a competitive advantage in its business domain. The study illustrates how the company scans the dynamically changing environments and tailors their products and services in accordance with these changes

Estimating the Cost of Equity in the Restaurant Industry: The Influence of Index and Variable Selection

Estimating the required rate of return for a project is a challenging issue that is on the agenda of almost any hospitality manager (Olsen, West, and Tse, 1998). The motivation of this paper is to assess the performance of the various cost of equity variables and the influence of market index selection on the cost of equity estimates in the restaurant industry. The observation period of this study is between 2000 and 2004 and the sample entailed 81 restaurant firms. Three market indices Equal Weight Return Index of CRSP (EWCRSP), Value Weight Return Index of CRSP (VWCRSP), and Standard & Poor’s (S&P) 500 and five cost of equity variables Fama-French (three variables) momentum (UMD), and liquidity were used in this study. In all instances, the Fama-French (FF) model resulted in a significant R2 change over the CAPM which showed that the two Fama-French variables (SMB and HML) explained some extra variance over and above the CAPM. The full five-variable model performed worse than the FF model for all market indices. As a result, it is recommended that restaurant executives/entrepreneurs use the FF model by averaging the cost of equity estimates of the three market indices

Reasons for Employee Turnover in Oklahoma Lodging Properties

School of Hospitality and Tourism Managemen

Corporate Real Estate Holdings and Financial Performance of Restaurant Firms

Most restaurant firms, by their operational nature, own and operate a large amount of corporate real estate (CRE), even though real estate is not their primary business activity. This is not only common across restaurant firms of different sizes but also linked to their sales and profitability. Borrowing the arguments of resource-based theory and using financial data for the years between 1999 and 2014, this study investigated the relationship between CRE holdings and restaurant firm performance in the United States. Briefly, our findings demonstrate that the CRE ratio and the rent ratio, in particular, have different impacts on restaurant firms’ financial performance and market-driven risk structures when different forward lags are considered

Disentangling the effect of family involvement on innovativeness and risk taking: the role of decentralization

This study investigates the effect of family involvement on family firms' entrepreneurial behavior through decentralization. Borrowing from agency theory and using a sample of 145 entrepreneurs, this study contributes to entrepreneurship literature by providing a fine-grained explanation about how a decision-making mechanism such as decentralization influences the relationship between family involvement and innovativeness, and risk taking of family firms. Furthermore, this study demonstrates the importance of considering heterogeneity of family firms and the focal role of decentralization in spurring up firm-level entrepreneurship

A Successful International Joint Venture: Exploring the Critical Success Factors of Starbucks Korea

International joint venture has become a key foreign entry mode among global service firms. Scholars have devoted significant attention to the theory of international joint venture in the past three decades. However, despite growing interest from academics and practitioners alike, research that would synthesize the model of a successful international joint venture in the service industry has not been established. To close this gap, we undertook a qualitative study using Starbuck Korea case. This study investigates how Starbucks Korea, an international joint venture between the Starbucks Corporation and the Shinsegae Corporation (the Korean joint venture partner of Starbucks Korea) has been successful in the competitive Korean coffee market. Specifically, the study highlights how the partners involved in Starbucks Korea have successfully collaborated and developed mutual trust while bridging cultural, geographic and language gaps

Exploring key service quality dimensions at a winery from an emerging market’s perspective

Purpose The purpose of this paper is to uncover the service quality dimensions that influence satisfaction with wineries and future intentions to return among Chinese consumers. With the rapidly growing popularity of wine consumption among Chinese consumers, an increasing number of Chinese consumers are visiting wineries in Western countries. However, while substantial research about wine tourism in Western countries has been published, there is very little research available with respect to wine tourism in China and the Chinese winery visitors who visit them. Design/methodology/approach A convenience sampling method was selected. Specifically, snowball sampling was used to collect the study’s data due to the limited number of Chinese consumers who drink wine and who have been involved with wine tourism. Research assistants who speak Chinese fluently used snowball sampling to recruit Chinese consumers in Yentai region who had participated in wine tourism in the past and asked them to complete the research survey. The research assistants distributed 200 surveys through a snowball sampling and collected a total of 179 responses. Findings The study’s results suggest that wine tasting operations, such as a variety of wines at tasting room tastings, and the quality of the wines tasted, along with staff attitudes are critical components that influence Chinese wine tourists’ satisfaction and loyalty. Research limitations/implications The major contribution of this paper is that it builds on extant wine tourism literature by providing insights into the characteristics of Chinese wine tourists. The paper also illuminates the linkage between winery service quality attributes and Chinese wine tourists’ satisfaction and loyalty. Practical implications The results of the study provide a useful guide to both academics and winery operators interested in developing a competitive winery service quality strategy for Chinese wine tourists. Originality/value Given the scarcity of literature linking winery service quality attributes and Chinese wine tourists’ satisfaction and loyalty, this study is one of the few studies to explore this relationship. </jats:sec

How Is the Premium Calibrated for the Speculative Risk in Lodging Firms?

The overarching themes of our paper are to calibrate the risk premium relative to the speculative risk parameters in capital markets and to analyze the pre-and post-recession patterns in the U.S. lodging portfolios from 2000 to 2016. We decompose several risk parameters speculated by the markets and risk-adjusted proxies to make solid judgments about the anomalies in excess return patterns and risk-reward trade-off calibration in our annualized heterogeneous portfolio sorts. Our primary findings reveal that our portfolio sorts did not return the efficient premium to the investors, as they should have been based on the speculative risk levels before the recession. However, after the recession, there was a correction in this pattern. Lastly, speculative risk-adjusted proxies and risk parameters generally co-move with the value-weighted benchmark

Emperical Investigation of the CAPM vs. Fama-French Model: Evidence From the Lodging Industry

Proper estimation of the cost of equity continues be a challenge for business executives in their capital investment decisions. This is evidenced by the heated scholarly debate in the last two decades over the issue of what model should be used in estimating cost of equity capital. The present study empirically investigates two of the main cost of equity models in their capacity to explain the variability in the lodging stock returns. The results reveal that Fama-French model consistently outperforms the Capital Asset Pricing Model in its explanatory power of cross-sectional lodging industry portfolio returns for the examination periods of 1993-2002 and 1998-2002. In addition, the Fama-French model provides a more realistic cost of equity estimate by adjusting for size and financial distress of the lodging portfolio