[We’re pleased to welcome Mark Johnson of Michigan State University. Dr. Johnson recently collaborated with A. J. Singh of Michigan State University and Qing Ma of Cornell University on their paper “The Impact of Authorization of the Travel Promotion Act on Hotel Firm Stock Returns” from the February issue of Cornell Hospitality Quarterly.]
I have found that some of the best research ideas arise from comments made by accountants. This occurs because accountants keep close track of firms and industries through the process of auditing and consulting. Our curiosity was peaked when we read a publication from Ernst and Young. In this publication they mentioned the Travel Promotion Act as one of the three most important issues facing the Hotel Industry in 2011.
Our results were surprising to us for two ways. One, the stock price impact from the act was larger than we had anticipated. Two, the way in which a firm is organized, c-corp versus REIT, influenced the degree to which a firm could capture value from the act.
The most important result from our research is that Travel Promotion by the Federal Government produces wealth in the Hotel Industry. This result is particularly important because policy makers are currently reviewing the progress of TPA since its inception. We hope that our analysis encourages policy makers to continue to support the act now and in the future.
You can read “The Impact of Authorization of the Travel Promotion Act on Hotel Firm Stock Returns” from Cornell Hospitality Quarterly for free by clicking here. Want to know about all the latest research like this from Cornell Hospitality Quarterly? Click here to sign up for e-alerts!
Mark S. Johnson is a Professor of Practice, Finance, at the Eli Broad Graduate School of Management, Michigan State University, East Lansing. Dr. Johnson’s research interest has focused on the market for corporate control and the impact of government regulations on the market value of firms
A.J. Singh is the International Lodging, Finance and Real Estate Professor in The School of Hospitality Business at Michigan State University. Dr. Singh’s research is heavily involved with predicting the U.S. lodging industry’s current and future sources & needs of financing. An integral part of his research is to work closely with industry leaders representing the lodging, real estate and financial services industries.
Qingzhong (Qing) Ma is an assistant professor of finance in the School of Hotel Administration at Cornell University. His research is in the area corporate finance, especially mergers and acquisitions, divestitures, corporate restructuring, corporate governance, behavioral finance, insider trading, and their applications in the hospitality industries.