What explains differing holding periods across hotel investments? A hazard rate framework
| Autor: | Cédric Poretti, Prashant Das |
|---|---|
| Rok vydání: | 2020 |
| Předmět: |
Finance
business.industry Strategy and Management 05 social sciences Hazard ratio Diversification (finance) Hospitality industry Holding period Market liquidity Capital expenditure Tourism Leisure and Hospitality Management Real estate investment trust 0502 economics and business 050211 marketing business 050203 business & management |
| Zdroj: | International Journal of Hospitality Management. 89:102564 |
| ISSN: | 0278-4319 |
| DOI: | 10.1016/j.ijhm.2020.102564 |
| Popis: | We explain the variation in hotel holding periods (HP) based on liquidity needs, owner type, acquisition conditions and timing of hotel renovation. Contrary to popular belief, properties owned by listed companies tend to have longer HPs due to lower liquidity constraints. REITs sell heterogeneous hotels sooner to strengthen their focus whereas REOCs keep such assets longer for diversification benefits. Moreover, we document that higher quality hotels tend to have longer HPs, and that capital expenditure employed in renovating an acquired asset prolongs the HP whereas assets renovated before acquisition experience shorter HPs. Finally, we show how our model can be used in practice to predict the median HP based on a given hotel characteristics, and present a method to adjust the DCF discount rate according to the selected holding period. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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