Mark S. Johnson on the Travel Promotion Act’s Impact on Hotel Firm Stock Returns

[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 cqx coveraccountants. 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!

575c2fc6d81ed395ddc4f8d8f696e987Mark 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

d83aa498f991084b6ecf5b866b46d86aA.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.

get.htmlQingzhong (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.

This entry was posted in Finance, Hospitality Management, Hospitality Marketing, Performance, Politics, Tourism, Travel and tagged , , , , by Cynthia Nalevanko, Senior Editor, SAGE Publishing. Bookmark the permalink.

About Cynthia Nalevanko, Senior Editor, SAGE Publishing

Founded in 1965, SAGE is the world’s leading independent academic and professional publisher. Known for our commitment to quality and innovation, SAGE has helped inform and educate a global community of scholars, practitioners, researchers, and students across a broad range of subject areas. With over 1500 employees globally from principal offices in Los Angeles, London, New Delhi, Singapore, Washington DC, and Melburne, our publishing program includes more than 1000 journals and over 900 books, reference works and databases a year in business, humanities, social sciences, science, technology and medicine. Believing passionately that engaged scholarship lies at the heart of any healthy society and that education is intrinsically valuable, SAGE aims to be the world’s leading independent academic and professional publisher. This means playing a creative role in society by disseminating teaching and research on a global scale, the cornerstones of which are good, long-term relationships, a focus on our markets, and an ability to combine quality and innovation. Leading authors, editors and societies should feel that SAGE is their natural home: we believe in meeting the range of their needs, and in publishing the best of their work. We are a growing company, and our financial success comes from thinking creatively about our markets and actively responding to the needs of our customers.

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