Pricing commercial real estate has its foundations in present value theory. Recent improvements for accessing transaction data have stimulated interest in commercial property hedonic pricing models, the structures of which follow traditions in single-family real estate in that the implicit prices of property characteristics and sitespecific variables represent city and national market conditions. Adding present value variables has become increasingly common to account for general market conditions. We test two hedonic pricing models; one that follows the residential tradition and another that departs by incorporating city-specific net operating incomes and the discount rates. Modeling prices in these alternative ways allows for recognition of the relative contributions of property, city, and capital market determinants. Empirical testing relies on a sample of hotel transactions from 2005-2010. The responsiveness of hotel cash flows to market changes is an important consideration. We find that models with property characteristics perform about the same as models that also include present value variables. A plausible explanation for this phenomenon is that implicit prices corresponding to property characteristics and site-specific variables appear to reflect income streams associated with city and nationwide economic conditions.

This study addresses the question of how currency exchange rates affect aggregate hotel demand in the U.S. over time, among chain scales, and gateway cities. The effect is isolated after controlling for hotel room rates, real personal income, and other demand determinants. Exchange rates had a significant, although minor, influence on U.S. hotel demand from 1992 Q1-2012 Q1. Disaggregate analyses using data organized by time periods corresponding to Internet availability does not offer new insights about how exchange rates affect U.S. hotel demand. Analyses using chain scale and gateway city data, however, reveal that exchange rates strongly influence hotel demand in luxury, upper-upscale, and upscale segments, with a much weaker relationship among lower-price hotels. The exchange rate effect is strongest for upper-price hotels in gateway cities.

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From time to time, someone at Cornell's School of Hotel Administration has received a phone call to the effect of, "Hi. I've just bought a hotel. Could you please send me the book on how I should run

Excerpt] From time to time, someone at Cornell's School of Hotel Administration has received a phone call to the effect of, "Hi. I've just bought a hotel. Could you please send me the book on how I should run it?" Unfortunately, there is no simple book to tell you exactly how to run a hotel. Even after reading this book, you now have only a broad overview of the intricacies of hotel operations. With this book, though, you can see the Four Paths to Success that you can follow in the hospitality industry. With this overview you can investigate further the many issues you need to consider in order to be successful in the hospitality industry.