Hotel Real Estate Investment Trusts' Risk Features and Beta Determinants

Kim, Hyunjoon; Gu, Zheng; Mattila, Anna S.

doi:10.1177/1096348002026002004

Cited by 77 publications

(116 citation statements)

References 27 publications

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“…Kim et al (2002), Lee and Jang (2007), Borde (1998), Gu and Kim (2002), and W. Kim et al (2007) found leverage as a key risk factor in explaining the performance of firms in the hotel, airline, and casino industries, respectively. In this article, we investigate the relation between leverage and stock returns of all hospitality firms listed in the London Stock Exchange with operations as hotels, restaurants, pubs, travel companies, and entertainment firms.…”

Section: Research Backgroundmentioning

confidence: 99%

“…The Introduction Leverage is a key variable that plays an important role on firm performance (Delcoure & Dickens, 2004;Mandelker & Rhee, 1984). Borde (1998), Gu and Kim (2002), H. Kim, Gu, and Mattila (2002), W. Kim, Ryan, and Ceschini (2007), and Lee and Jang (2007) found that leverage is an important risk factor that affects hospitality firms in particular. Thus, we examine the relation between leverage and stock returns in the hospitality sector, which is a sector that is very reliant on external financing.…”

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confidence: 99%

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The Impact of Leverage on Stock Returns in the Hospitality Sector: Evidence from the UK

Muradoğlu¹,

Sivaprasad²

2014

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a relatively low level of operating inventories, it requires a relatively high level of capital for its real estate component. This component often includes buildings, operating systems, furniture, and restaurant equipment, and this ordinarily involves securing external financing to acquire these assets.This article addresses an important question regarding the relation between leverage and its effect on stock returns of firms in the hospitality sector. The nature of the industry is important when studying the leverage return relation. Arditti (1967) and Melicher (1974) argued that the true nature of leverage return relation can be disclosed only by testing this relation within industries. The THE IMPACT OF LEVERAGE ON STOCK RETURNS IN THE HOSPITALITY SECTOR: EVIDENCE FROM THE UKYAz GŰLNUR MURADOĞLU* AND SHEEJA SIVAPRASAD † *School of Business and Management, Queen Mary University, London, UK †Department of Accounting, Finance and Governance, University of Westminster, London, UK This article examines the relation between capital structure and abnormal returns for the UK hospitality sector by using an investment strategy based on hospitality firms' capital structure. We find that abnormal returns are higher, 0.53% per annum, for medium leverage hospitality firms, and it can be increased up to 0.91% by investing in medium leverage and low price-to-book value firms. The findings raise an important issue for the hospitality sector as the firms in this sector are continually aiming to raise external finance to fund expansion. This is a unique situation when compared to other sectors in the economy whereby investors earn higher abnormal returns when investing in low levered firms.

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Section: Research Backgroundmentioning

confidence: 99%

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confidence: 99%

The Impact of Leverage on Stock Returns in the Hospitality Sector: Evidence from the UK

Muradoğlu¹,

Sivaprasad²

2014

Tourism Analysis

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“…Leverage keuangan berkaitan dengan sumber dana yang berasal dari utang yang akan mengakibatkan beban tetap tertentu dengan harapan akan meningkatkan keuntungan pemilik modal (Weston dan Brigham, 1991 Kim et al, (2002); Logue & Merville (1972;Melicher (1974). Perusahaan yang relatif besar cenderung terdiversifikasi dan tidak mudah mengalami kebangkrutan sertata risikonya rendah (Titman & Wessels, 1988).…”

Section: Pendahuluanunclassified

Systematic Risk : Variabel yang Mempengaruhi

Sujana

2017

Ekuitas

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ABSTRAKInvestor dalam mengambil keputusan investasi di pasar modal khususnya saham selalu dihadapkan kepada berbagai risiko. Menurut teori Capital Assets Pricing Model (CAPM), risiko total suatu perusahaan terdiri dari 2(dua) tipe yaitu: risiko sistematis dan risiko tidak sistematis. Dalam artikel ini hanya dibahas risiko sistematis. Risiko sistematis adalah risiko yang berkaitan dengan perubahan yang terjadi di pasar secara keseluruhan. Risiko sistematis ini dipengaruhi oleh kondisi perekonomian, keamanan, politik, dan sebagainya baik yang berasal dari dalam negeri maupun luar negeri. Variabel yang mempengaruhi systematic risk adalah: (1) variabel keuangan yang meliputi: liquidity, financial leverage, operating leverage, profitability, firm size, growth; (2) variabel makro ekonomi yang meliputi: inflasi, suku bunga, market capitalization, dan government deficit.Kata kunci: systematic risk, variabel keuangan, dan variabel makro ekonomi ABSTRACT Investors in making investment decisions in the capital market, especially the stock are always exposed to various risks. According to the theory of Capital Assets Pricing Model (CAPM), the total risk of a company consists of two (2) types: systematic risk and unsystematic risk. Discussed in this article only systematic risk. Systematic risk is the risk associated with changes in the overall market. Systematic risk is influenced by economic conditions, security, political and so good that comes from within the country and abroad. Variables affecting the systematic risk are: (1) The financial variables include: liquidity, financial leverage, operating leverage, profitability, firm size, growth; (2) The macro-economic variables that include: inflation, interest rates, market capitalization, and the government deficit.

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“…For REITs in the hotel, storage, and office categories, the reported returns and risk are higher than those of the S&P's MidCap Index. Kim et al (2002b) investigate the risk features of hotel REITs in terms of systematic and unsystematic risk components. The findings show that 84% of the total risk of hotel REITs is attributed to unsystematic risk and that the systematic risk is shown to be positively correlated withdebt ratio and asset growth of hotel REITs but negatively with REIT's size.…”

Section: Literature Reviewmentioning

confidence: 99%