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The purpose of this paper is to explore the impact of long-term debt and firm value in the lodging industry. Previous research on capital structure in the lodging industry has been conducted in an attempt to understand what motivates the use of debt. We explore this further by assessing whether or not this debt use translates into increases in firm value. The regression analysis shows that after controlling for size and risk, we find a positive relationship with long-term debt and the value of the firm. Return on assets is negatively related to firm value, but capital expenditures are not.

The purpose of this paper is to investigate, empirically, the value relevance of the degree of internationalization in publicly traded restaurant firms in the USA.

Data for the study were obtained from the Compustat Industrial Annual. Pearson correlation analysis, regression analysis, and Vuong's Z‐test were employed to analyze the data.

The paper has two principal findings: the degree of internationalization is positively and significantly related to market capitalization; and the relation is strong enough to cause an 18.3 percent increase in the explanatory power, in the presence of control variables.

The method of expansion might have some impact on market capitalization and this is not explicitly controlled for in the study due to data and cost constraints. Moreover, there are likely other variables affecting firms' market capitalization, but due to data constraints, they are also not included in the model.

The results indicate firms, which decide to diversify abroad, see their market capitalization changes positively with the degree of internationalization.

There are many studies that investigate the behavior of firms that diversify abroad; however, this is the first study to the authors' knowledge that examines the impact of the degree of internationalization on the stock market capitalization in the hospitality industry.

The purpose of this paper is to compare traditional methods of estimating the cost‐of‐equity (capital asset pricing model and Fama and French three‐factor model) with a new approach, implied cost‐of‐equity method, to provide lodging analysts, investors, executives and researchers with a more reliable way to estimate cost‐of‐equity.

The study uses data from publicly traded lodging firms in the USA that provide all necessary financial data for cost‐of‐equity estimation. The data range from 1976 to 2005.

The study finds that the price‐to‐forward earnings (PFE), using the implied cost‐of‐equity (ICE), approach, estimates cost‐of‐equity of publicly‐traded lodging firms more reliably, compared with CAPM.

The study recommends that lodging industry analysts, investors, executives and researchers adopt the ICE approach, especially using the PFE model, to estimate cost‐of‐equity of publicly‐traded lodging firms.

The study attempts to provide a more reliable approach to estimate cost‐of‐equity for publicly‐traded lodging firms, specifically compared with the traditional approach, the CAPM.

The purpose of the paper is to explore the likely main driving forces behind the internationalization process for publicly traded restaurant firms in the USA, and to offer restaurant executives insights for successful expansions into the international arena.

The paper uses data from publicly‐traded restaurant firms in the USA that have made the decision to expand internationally. The data spans both sides of the decision, i.e. before the international expansion and right after.

This paper finds that firms that are growing rapidly, have lots of debt, or are in an economy that is growing rapidly prefer to expand in the domestic market. In contrast, firms that have achieved a high level of market penetration tend to expand in the international markets.

The paper recommends the following key factors to be considered before a decision is made to expand internationally: size, leverage, penetration, and annual market excess return.

This paper attempts to provide, for the first time, systematic financial evidence about the factors that executives should consider during their strategic decision making process of firm internationalization.

This paper seeks to accomplish three objectives. First, based on prior research, this paper attempts to infer the value relevance of earnings and equity for firm valuation in the restaurant industry. The second objective is to document the joint information content of earning and equity in firm valuation. Finally, the model tested above is used to evaluate the relevance of capital structure for firm valuation in the static capital structure framework. The empirical results indicate that the incremental R2 associated with earnings was found to be generally less than the incremental R2 associated with equity. The adjusted R2 of the model that included both earnings and equity ranged from 0.54 to 0.77. The results suggest that the addition of capital structure variables have no incremental explanatory power in explaining the market value of firm, in the presence of earnings and equity.

Examines the capital structure decisions of restaurant firms. Hypothesizes that these decisions are based upon a financial “pecking‐order” as well as the position of the firm in the financial growth cycle. Using ratios from publicly‐traded restaurant firms in the USA and ordinary least squares regression models, the results tend to support the notion that both the pecking‐order and the financial growth cycle influence financing decisions. However, the results also indicate that there may be separate factors affecting long‐term and short‐term debt decisions made by restaurant managers.

The purpose of this paper was to investigate the factors influencing financial performance of small hotels, particularly in developing countries like Tanzania.

This investigation used financial ratio analysis on business performance data collected from small hotels in Tanzania through face‐to‐face interviews. Currently there is no existing data on such aspects of the hotel industry in Tanzania. As a consequence, Arusha region was selected as the sample for this study due to a significant amount of hospitality industry activity in this area.

Findings of this investigation suggest that operating factors in small hotels such as inefficiencies due to lack of employee training, low investments in fixed assets and technology may be equally responsible for low profitability as are government policies that ignore appropriate emphasis on ensuring safety and security, and quick processing of licenses and permits.

Even though this is one of the few studies that has investigated the profitability of small hotels in a developing country, its findings are based on the analysis of one (even though a prominent) tourist area of East Africa.

Nevertheless, findings provide preliminary evidence for professionals and policy makers to critically evaluate factors that would ensure profitability of small hotels in countries such as Tanzania.

As this paper highlights, this is critical because such businesses are locally owned and may truly and positively influence economic development.

The paper aims to provide empirical evidence that certain financial characteristics are critical for lodging firms to earn a higher profit. Further, it proposes, perhaps more importantly, a robust empirical framework for identifying outperformance in profitability, which has been barely studied in the lodging industry.

The paper employed logit models, under the framework of comparative advantage theory, to explore the relationships between firm financial characteristics and outperformance from a financial perspective.

This study, for the first time, provides systematic empirical evidence on how to identify lodging firms that outperform their competitors over time. From a practical standpoint, owners and managers should use industry medians to benchmark financial performance, focusing on factors such as leverage, book to market, asset turnover, and firm size to ensure financial performance leadership among lodging firms. Moreover, echoing previous research, a franchise appears to help differentiate an outperforming firm from its competitors in a positive way.

Because of the chosen research framework, the study results need to be interpreted with caution. Specific suggestions appear in the section of limitations and future research.

The paper includes implications of general guidelines to identify financial characteristics that differentiate outperforming firms from their competitors as well as some specific action plans for investors, practitioners, and researchers to consider.

This paper is the first one that provides systematic empirical evidence on how to identify lodging firms that outperform their competitors over time, thus shedding lights on what financial characteristics lodging firms should keep a close eye on for a better future.

The purpose of the current study is to investigate the existence of a negative synergy effect of internationalization and firm size on firm performance for publicly traded US hotels.

The study performs the two-way fixed-effects model to investigate the proposed negative synergy effect.

The findings do not support the proposed negative synergy effect, but support the positive synergy effect of internationalization and firm size on performance.

This study examines the hypothesis developed based on the agency cost theory using the hotel industry's unique monitoring cost argument. However, findings support the opposite, implicitly suggesting that the hotel's monitoring cost in the international franchising context may not be severe as some expect.