Who are the bulls and bears in global lodging markets?

Albert Barreda
M. Kizildag

This paper received “Best Paper Award” from the 27th Annual Association of Hospitality Financial Management Educators (AHFME) Research Symposium in November 2014


This article looks at the values of market-based equities (common stocks) based on the relative investment valuation analyzed with several earnings multiples in global lodging markets in 2014. To be specific, we compare the value of various common stock portfolios sorted for four geographical regions with those relative value investment metrics in order to make a solid judgment about bullish and bearish markets demonstrating investors’ confidence or stagnancy, anomalies in prices indicating under- and overvalued stocks, and outperforming lodging portfolios in global markets. Common stock prices in portfolios are standardized utilizing earnings parameters such as (a) Current Price/Earnings Ratio (PE, hereafter) and its variants (Trailing and Forward PE), Price/Earnings to Growth (PEG, hereafter), and The Market Value of Debt and Equity free of Cash-to-EBITDA (Value/ EBITDA). Linking the relative value with earnings proxies and the stock portfolios, which are extracted in a homogenous industry but are sorted from heterogeneous regions, primary findings of this article reveal that western and eastern markets have outperformed the Latin markets in regard to future earnings estimate, earnings growth, and excessive returns from the invested capital.