This study focuses on how the concept of country of origin (COO) and national loyalty affect purchasing decisions of prospective travelers when purchasing airline tickets. The objectives of this study are to understand: (a) the relationship between demographic structures of travelers and their national loyalty status, (b) the relationship between national loyalty and national airline perceptions, (c) the construction and analysis of the measurement of national airline preference scale, and (d) testing the relationship between national loyalty, national airline perception, and preferences of foreign airlines. Data collected from 136 people residing and employed in three districts of Pennsylvania. The study findings denote that the national loyalty status of travelers affects the purchasing behaviors of air travelers. Prospective travelers do not prefer foreign airline service providers, thinking that they may damage the national airline companies and national economy. The effects of national loyalty include overrating the service quality and merit of national airlines and underrating the merits of foreign airline services. The findings of this research propose that foreign airline companies should convince international travelers that preferring their services over other airlines would not result in a disadvantage of national airlines or deteriorate economic conditions in their home countries.

Purpose - Borrowing from arguments of agency theory, the present study aims to investigate the moderating effect of the deviation from optimal franchising on the relationship between corporate governance provisions and firm financial performance.Design/methodology/approach - The sample consists of 35 publicly listed US restaurant firms for the 1990-2008 period. The study uses a hierarchical regression with cross-sectional time-series fixed effects.Findings - The results show that the deviation from optimal franchising worsens the negative relationship between corporate governance provisions and firm performance.Research limitations/implications - The availability of governance data restricts our sample to large publicly listed firms in the US restaurant industry, limiting the ability to generalize results for small and privately held restaurant firms.Practical implications - Firm executives should not only pay attention to which corporate governance provisions they adopt but also strive to maintain an optimal level of franchising.Originality/value - The key contribution of this study to governance literature is that this study demonstrates how the presence of multiple governance mechanisms influences firm performance.

The purpose of this study is to investigate the biometrics technologies adopted by hotels and the perception of hotel managers toward biometric technology applications. A descriptive, cross sectional survey was developed based on extensive review of literature and expert opinions. The population for this survey was property level executive managers in the U.S. hotels. Members of American Hotel and Lodging Association (AHLA) were selected as the target population for this study. The most frequent use of biometric technology is by hotel employees in the form of fingerprint scanning. Cost still seems to be one of the major barriers to adoption of biometric technology applications. The findings of this study showed that there definitely is a future in using biometric technology applications in hotels in the future, however, according to hoteliers; neither guests nor hoteliers are ready for it fully.

Utilizing data collected from frontline and service contact employees, this study identifies employees’ work values for a hospitality business, and then examines differences among employees belonging to different generations. Through an exploratory factor analysis, seven dimensions of employees’ work values are identified. Results of a series of one-way ANOVA tests reveal significant differences among three generation of employees’ work values. Managerial implications and recommended strategies to manage those differences to create and maintain a work environment that foster leadership, motivation, communication and generational synergy are discussed.

ABSTRACT Accurate estimation of cost of equity is critical when making capital investment decisions to allocate valuable corporate resources. While the importance of proper estimation of required rate of return of an investment project is well documented, challenges surrounding estimation of the cost of equity still abound. This paper empirically evaluates the viability of common cost of equity models to estimate required rate of return for the U.S. restaurant industry for the 1996–2010 period. The full model, which consists of five risk factors, emerges as the soundest cost of equity model for the U.S. restaurant industry. We recommend that future studies assess the performance of cost of equity models in other countries and other segments of the hospitality industry.

ABSTRACT There is a growing awareness that corporate governance variables play an important role in firm performance. While the majority of researchers argue that firm performance is positively associated with corporate governance structure, some other scholars suggest that there is no link between corporate governance/shareholder rights and firm performance. In order to test the effect of corporate governance on firm performance, we include 35 publicly traded restaurant firms in our study. In order to find the effects of the shareholders' rights on firm performance, we employ the G-Index score developed by Gompers et al. (2003) and retrieved data between 1990 and 2006. Normally, the G-index score ranges between 0 and 24. However, in our study, it ranged between 3 and 13. As a result, companies that had a G-index of 8 or lower were classified as “democratic” governance firms. On the other hand, companies with a G-index of 9 or higher were placed into “moderate” governance firms category. That is, no “dictatorship” firms existed as per definition of Gompers et al. (2003). The dependent variable (firm performance) was measured by Return on Assets (ROA), Return on Equity (ROE), Operating Cash Flows (OCF), and five risk-adjusted performance measures (Sharpe Ratio, Treynor Ratio, Jensen Index, Sortino Ratio, and Upside Probability Ratio). The findings show that democratic firms outperformed moderate portfolios based on ROA and ROE after controlling for size and leverage. We report that governance provisions do not explain significant variation in firm performance for the remaining performance measures. Future studies should use absolute dollar value measures such as Economic Value Added or Shareholder Value Added to provide additional insights into this area of research. We are hopeful that these avenues of research will be explored in the near future.

ABSTRACT The United States decided to implement IFRS for its publicly traded companies. The road map calls for the SEC to decide how to proceed to the mandatory use of IFRS in 2011. Developing a plan around IFRS implementation is becoming increasingly important for hospitality companies. The research institute of Hospitality Financial and Technology Professionals has published a white paper discussing the impact of the convergence of the IFRS on the hospitality industry. The transition from U.S. GAAP to IFRS will certainly cause some challenges for publicly traded lodging companies. The question is whether individual lodging properties, which mainly use USALI as a guide for financial transactions, will be affected by this transition.

Purpose - The purpose of this study is to examine and to compare the most utilized information technology (IT) investment decision methods between hotels with centrally managed IT, and hotels with locally managed IT.Design/methodology/approach - The empirical data were collected via a structured questionnaire from hotel managers in the USA.Findings - The key findings of the research are that evaluation activities for hospitality IT investments have not been performed widely and consistently. Although sophisticated evaluation methods have been developed over the years, they do not appear to have provided a satisfactory answer to improve IT decision-making practice. In this study, significant differences were found in how IT investments are evaluated in hotels with centrally managed IT as compared to hotels with locally managed IT. The hotels with centrally managed IT tend to use more financial and non-financial evaluation methods since all investments are expected to show a positive return on investment.Practical implications - The research findings highlight the importance of the use of IT investment evaluation techniques in hotels and the major differences between hotels with centrally and locally managed IT.Originality/value - The literature on IT investment evaluation methods in the lodging industry is limited. Being one of the first studies in this area, these research findings are particularly valuable for practitioners and researchers.

This study evaluates the risk-adjusted performance of three restaurant segments between 1 January 1998 and 31 December 2004. The Jensen, the Treynor and the Sharpe indexes were adopted as an analytical framework. The findings here are not entirely consistent with those of Kim and Gu (2003) because they show that the quick-service segment outperforms the other two segments. However, using NASDAQ, NYSE and S&P 500 as benchmarks, this study illustrates that the performance of the economy/buffet segment tops the quick-service and full-service segments. It further indicates that the restaurant industry carries too much unsystematic risk, which it needs to reduce.

PurposeThis paper aims to examine and analyze the findings of an empirical survey of the productivity of guest‐related IT applications and perceptions of hotel managers on IT competency in upscale hotels in Turkey.Design/methodology/approachThe data is collected via a structured questionnaire from 122 upscale hotels in Turkey.FindingsThe findings of this study show that hotel managers view guest‐related IT applications as highly productive and appreciate IT's benefits. It seems there is a strong relationship between guest‐related IT applications and productivity in the lodging industry.Research limitations/implicationsThis study reflects the perception of hotel managers working in a specific country, i.e. Turkey (and only upper class hotels).Practical implicationsThis study provides a useful insight for hoteliers to understand the productivity dimensions of guest‐related IT applications. This understanding will shape the patterns of decision makers when considering the adoption of certain technologies or when preparing IT capital budgets. The results will also assist hoteliers to adopt the most beneficial technologies and formulate more appropriate strategies around customer preferences.Originality/valueChanges in customer preferences and new innovations leave some technology applications outdated or useless. This study provides a new perspective on the productivity of guest‐related IT applications. The findings of this paper can be used as a guide for hoteliers deciding on which IT applications to be implemented to meet customer expectations while maximizing the benefits of a hotel property.

This article reports the shareholder wealth effects of restaurant firms going private. In addition, this study uncovers firm characteristics that influence the magnitude of the stock bid premiums. This study includes 27 publicly traded restaurant companies that went private between 1995 and 2004. The findings indicate that shareholders of restaurant firms that were taken private enjoyed a highly positive, abnormal return of 26%. Cluster analysis demonstrated that highpremium restaurant firms had higher market-to-book (MB) ratio and cash holdings, lower debt, and market capitalization. A logistic regression model which consisted of cash holdings and debt-toequity variables successfully classified more than 75% of firms into low and high-premium firms.

ABSTRACT Over the last five years, the hospitality industry has witnessed an exceptional level of transaction activity, changes in hotel ownership, and new management structure. There is a common belief that the combination of low interest rates, depressed stock prices, and rising corporate profits created ideal conditions for private equity firms to flourish. This study argues why publicly traded lodging companies became the targets for private equity firms, and also discusses why private equity firms place a higher value on hotel firms that possess strong brands and higher degrees of intangible assets. On one hand, some scholars claim that private equity funds invest in hotel real estate as a financial asset, and the main reason for investment is to sell the hotel properties for a higher price in the future. Others contend that the market is completely out of touch with economic reality and unlimited funds in the market are seeking a safe home. This article does not offer a conclusion for the hotel valuation argument, but rather sheds some light into the current phenomenon of private equity. It seems that, at this stage, it is not feasible to use inferential statistical analysis to uncover the reasons hotel companies became targets of private equity buyouts. However, by using some of the extant industry body of knowledge, the researchers develop two key propositions that they hope will spur research in this area. The authors conclude that more insight is needed to understand the current investment phenomenon brought onto the scene by private equity firms over the last five years.

ABSTRACT ABSTRACT The changing business conditions and the inefficient corporate governance in the restaurant industry turned shareholders' attention to the executive compensation. This study examines determinants of the sensitivity in Corporate Executive Officers' (CEOs) cash compensation. The contribution of this study is that it uses pooled regression and analyzes annual percentage change in CEO cash compensation. The findings revealed that company stock returns and return on assets emerged as significant determinants of CEO pay sensitivity. The results of this study show that almost 90% of the variation in the sensitivity of CEO compensation in the restaurant industry remains unexplained and is left for future research. KEYWORDS: Pay for performanceexecutive compensationrestaurant industrypay sensitivity

ABSTRACT Estimating the required rate of return for a project is a challenging issue that is on the agenda of almost any hospitality manager. 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.