Credit Fluctuations and Lodging Firms: An Investigation of the Differing Capital Structures in the U.S. Lodging Industry

Keywords

credit fluctuations, lodging firms, capital structure, housing-price-index

Abstract

In the area of corporate finance, decisions regarding the constituents of overall capital structure are the most critical. These financing decisions are even more critical to lodging firms because of the unique nature of the industry. This study empirically investigates the effect of credit availability on the leverage of the lodging industry in the U.S. using multivariate analysis of variance. Three time points of differing credit availability (low, high, and average) were identified using the Case-Shiller home price index. Leverage, net leverage, and short-to-long-term debt ratios of large and small U.S. lodging firms were analyzed at these differing credit availability time points to assess any significant differences. Significant effects of credit availability were found on the leverage and net leverage of lodging firms, but no significant effect was found on the short- to long-term debt ratio of U.S. lodging firms. Interestingly, the leverage levels were found to be highest at the average availability of credit than when compared to the high and low availability of credit.

Publication Date

11-3-2014

Original Citation

Singh, D., Raab, C., Mayer, K., & Singh, A. (2014). Credit Fluctuations and Lodging Firms: An Investigation of the Differing Capital Structures in the U.S. Lodging Industry. International Journal of Hospitality and Tourism Administration, 15(4), 333-353.

Number of Pages

333-353

Document Type

Paper

Language

English

Source Title

International Journal of Hospitality and Tourism Administration

Volume

15

Issue

4

College

Rosen College of Hospitality Management

Location

Rosen College of Hospitality Management

This document is currently not available for download.

View via DOI


Share

COinS