Performance Comparison of Lodging REITs, Hotel C-Corporations and Resorts and Casinos

Kim, Woo Gon; Jackson, Leonard A.; Zhong, Jian

doi:10.5367/te.2011.0023

Cited by 8 publications

(6 citation statements)

References 20 publications

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“…After adjusting for risk, document underperformance of lodging REITs relative to other REIT subsectors, consistent with the results of Jackson (2009) and confirming that lodging REITs underperform retail REITs as well as other subsectors. In a subsequent study, Kim et al (2011) show that investors benefit from diversifying and adding lodging REITs to their portfolios. find that hotel REITs have the highest market risk compared with other subsectors.…”

Section: Introductionmentioning

confidence: 94%

Bubbles in US hotel/lodging real estate investment trusts

Almudhaf

2018

JPIF

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Purpose The purpose of this paper is to test for the presence of bubbles in the US lodging/hotel real estate investment trust (REIT) subsector from 1994 to 2016. It also compares the profitability of a buy-and-hold strategy with several technical trading rules when applied to lodging REITs. Design/methodology/approach To investigate speculative bubbles, the sequential right-sided unit root tests of Phillips, Shi and Yu (2015a, b) are used. Findings The results confirm the possibility of the existence of multiple bubbles and explosive behavior in prices and the price-dividend ratio. One of the detected bubbles coincides with the financial economic crisis of 2008 using both measures. In addition, several technical rules are found to be superior to a naïve buy-and-hold strategy even after adjusting for risk. Practical implications These findings will be of interest to policy makers, who can use such models as an early alert to take anticipative action to avoid bursting of bubbles and consequent negative effects on the economy. The findings also provide important information to investors attempting to devise trading rules that utilize the signals from bubble detection, as well as to hotel executives devising policies aimed at reducing risk and creating more firm value to maximize shareholder wealth. Moreover, valuation and bubbles are important to lenders and creditors who use assets as collaterals for financing hotel REITs. Originality/value Hotels are a unique hybrid of retail and housing that combine operating business with real estate. This paper is the first to investigate speculative bubbles in lodging REITs.

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Section: Introductionmentioning

confidence: 94%

Bubbles in US hotel/lodging real estate investment trusts

Almudhaf

2018

JPIF

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“…In more recent years, researchers have investigated the financial performance of lodging REITs in comparison to other business types to evaluate their performance based on historical data before the financial crisis (Jackson, 2009;Kim et al, 2002;Kim et al, 2011;Seo and Sharma, 2012;Sun et al, 2015). For example, Kim et al (2002) applied the Jensen index to evaluate the overall performance of hotel REITs within the market portfolio for the period of 1993 to 1999.…”

Section: Real Estate Investment Trustsmentioning

confidence: 99%

Postcrisis REIT performance using financial ratios: A DEA approach

Ampountolas

2020

Tourism Economics

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This study examines the performance of public lodging real estate investment trusts (REITs) following the financial crisis period from 2013 to 2017. We employed data envelopment analysis, a nonparametric technique based on linear programming, to measure performance. Determinants of efficiency were assessed by a set of financial ratios predicting each REIT’s efficiency against its peers. Consequently, a Malmquist productivity index (MPI) evaluated the efficiency change in several periods. The empirical results revealed that the REITs generally performed well despite the moderate degree of volatility in the financial ratios. Results showed a wide variation in performance consistency, with a limited number of REITs—that is, 5 out of 20—consistently performing well during the study period. Additionally, the MPI indicated a decline in efficiency, while the productivity change showed a mixture of reflections. The decomposition components of the productivity index and efficiency changes are also provided. This study sheds light on understanding inefficient REITs and provides some guidance on the critical indicators that would help such REITs restructure their operational strategies to improve efficiency.

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“…Both Kim et al (2002b) and Jackson (2009) find that lodging/ resort REITs underperform other REIT subsectors after adjusting for risk. However, in a later article, Kim, Jackson, and Zhong (2011) demonstrate that lodging REITs have lower volatility compared to stocks, and recommends adding lodging REITs to investment portfolios for diversification purposes. Tang and Jang (2008) and Kim and Jang (2012) find that the profitability and performance of hotel REITs are similar to that of hotel C-corporations, despite their different organizational characteristics and taxation.…”

Section: Introductionmentioning

confidence: 99%

Are Markets Adaptive? Evidence of Predictability and Market Efficiency of Lodging/Resort Reits

Almudhaf

Aroul

Hansz

2020

International Journal of Strategic Property Management

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We investigate the degree of return predictability of lodging/resort real estate investment trusts (REITs) from January 1994 to May 2016. We test the Martingale hypothesis by using linear (automatic portmanteau and automatic variance ratio with rolling windows) and nonlinear tests (generalized spectral shape tests and Dominguez-Lobato consistent tests). Our findings support the Adaptive Market Hypothesis (AMH) and reveal that returns experience periods of both dependence and independence. We document time-varying predictability of lodging/resort REITs with returns as both initially predictable and subsequently unpredictable throughout the majority of the period of analysis. Moreover, we find that if traders use simple technical trading moving average rules, they can capitalize on the inefficiencies of lodging/resort REITs. Finally, we observe that absolute returns and Sharpe ratios of technical moving average rules outperform a simple buy-and-hold strategy.

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Performance Comparison of Lodging REITs, Hotel C-Corporations and Resorts and Casinos

Cited by 8 publications

References 20 publications

Bubbles in US hotel/lodging real estate investment trusts

Bubbles in US hotel/lodging real estate investment trusts

Postcrisis REIT performance using financial ratios: A DEA approach

Are Markets Adaptive? Evidence of Predictability and Market Efficiency of Lodging/Resort Reits

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