Leveraged Buyouts in the Hospitality Industry: Five Years Later

When the author wrote her first article for the FIU Hospitality Review on leveraged buyouts' some five years ago, this business strategy was beginning to enjoy increasing popularity. Since that time leveraged buyouts grew to unprecedented levels both in number and size of transactions. However, following the failure of the UAL proposal and the collapse of the junk bond market in 1989, there has been a marked slowdown in buyout activity this article examines major developments affecting leveraged buyouts over the past five years and addresses their future implications for the hospitality industry.

An Analysis of Information Technology Publications in Leading Hospitality Journals

In response to the recent wide-scale applications of lnformation Technology (I/T) in the hospitality industry, this study analyzed articles in leading hospitality research journals, including the International Journal of Hospitality Management, Cornell Hotel and Restaurant Administration Quarterly, and the Journal of Hospitality & Tourism Research published in the period 1985 to 2004. A total of 1,896 full-length papers were published in these journals during the study period. Excluding book reviews, research notes, and comments from editors and readers, 130 full-length IT-related papers were identified. These papers were then grouped into six defined categories of IT. The findings revealed that during the entire study period, the largest number of publications were in general business applications, whereas the highest growth rate from the first decade to the second decade were in articles on networking

Overcoming The Impotency Of Marketing

In his dialogue titled - Overcoming The Impotency Of Marketing - K. Michael Haywood, Assistant Professor, School of Hotel and Food Administration, University of Guelph, originally reveals: “Many accommodation businesses have discovered that their marketing activities are becoming increasingly impotent. To overcome this evolutionary stage in the life cycle of marketing, this article outlines six principles that will re-establish marketing's vitality.” “The opinion of general managers and senior marketing, financial, and food and beverage managers is that the marketing is not producing the results it once did and is not working as it should,” Haywood advises. Haywood points to price as the primary component hospitality managers use to favor/adjust their marketability. Although this is an effective tool, the practice can also erode profitability and margin he says. Haywood also points at recession as a major factor in exposing the failures of marketing plans. He adds that the hotel manager cannot afford to let this rationale go unchallenged; managers must take measures to mitigate circumstances that they might not have any control over. Managers must attempt to maintain profitability. “In many hotels, large corporate accounts or convention business generates a significant proportion of occupancy. Often these big buyers dictate their terms to the hotels, especially the price they are prepared to pay and the service they expect,” Haywood warns. This dynamic is just another significant pitfall that challenges marketing strategy. The savvy marketing technician must be aware of changes that occur in his or her marketplace, Haywood stresses. He offers three specific, real changes, which should be responded to. “To cope with the problems and uncertainties of the hotel business during the remainder of the decade, six components need to be developed if marketing impotency is to be overcome,” says Haywood in outlining his six-step approach to the problem. Additionally, forward thinking cannot be over-emphasized. “A high market share is helpful in general, but an even more crucial factor is careful consideration of the market sectors in which the company wants to operate,” your author advises. “Taking tactical initiatives is essential. Successful hotels act; unsuccessful ones react. The less successful marketing operations tend to be a hive of frantic activity. Fire-fighting is the normal way of life in such organizations, Haywood observes. “By contrast, successful firms plan and execute their tactical marketing activity with careful timing and precision so as to create the maximum impact,” he extends in describing his fruitful marketing arabesque.

Restructuring In The Hospitality Industry

In her dialogue entitled - Restructuring in the Hospitality Industry - Elisa S. Moncarz, Associate Professor, the School of Hospitality Management at Florida International University, intends for you to know the following: “Recent years have seen a proliferation of restructurings of major American corporations creating an extremely important issue that has affected U.S. business. This article discusses restructuring issues in the hospitality industry, focusing attention on its causes and motivations, as well as on its benefits and perils. The author considers the impact of restructuring on investors and management while examining recent restructurings involving hospitality firms.” In defining the concept of restructuring, Associate Professor Moncarz informs you, “Restructuring entails the implementation of fundamental and comprehensive modification of a company's operational and/or financial structure.” “It has, indeed, become fashionable to take a company apart and put it back together in a different form,” the author says. Additionally, Moncarz refers to a Wall Street Journal study, dated August 1985, which reveals that nearly half the large American corporations were, or were soon to be restructured in the 1984/85 time frame. There are several distinct types of restructurings and the author wants you to be aware of some of them. “…threats of takeover attempts, the larger part of all restructuring have been initiated willingly in order to expand or divest a company's line of business (i.e., operational restructurings) or redirect its finances (i.e., financial restructurings),” the author reveals. “Two principal types of operational restructurings are mergers and acquisitions [M&A], and divestitures [disposing of unwanted units or assets],” Moncarz further defines the concepts of expansion and divestiture. The author explains several types of financial restructuring sketches used in the hospitality industry, including stock re-purchasing, debt issuances and redemptions, swapping debt for equity, and effective theories of realigning debt through extending loans and/or revising terms. To expand their businesses, Moncarz makes anecdotal reference to several major food and beverage corporations that have successfully employed operational restructuring principles. The author wades into the shallow end of the hostile takeover pool by explaining some of the corporate restructuring concepts used to repel that aggressive technique. Walt Disney Company completely redesigned their entire upper level management structure in a successful effort to thwart a hostile takeover bid by corporate raider Saul P. Steinberg, Moncarz informs. To close, the author touches on leveraged buyouts [LBOs], and stock repurchases to divest unwanted divisions and immobilize hostile takeover attempts. A lengthy table of - Selected Restructurings in the Hospitality Industry [1982 to date of article] – is also included.

Genetically Altered Foods: A Policy Issue for Multi-unit Food Service Operators

Although it is a substantial issue, the technology behind genetically altered foods and the concerns being raised about them are not well understood by most people. The authors discuss how genetically altered foods might fit into the business strategies of multi-unit food service operators as well as current policies and predispositions of multi-unit food service companies toward the use of genetically altered foods. They also outline the issues surrounding genetically altered food as they relate to the food service industry and provide a picture of where multi-unit food service operators currently stand on the technology

Property Exchange Rules Offer Tax Opportunities for Hotel Owners

One strategy often overlooked by hospitality owners in developing cost-saving strategies is the use of like-kind exchanges to acquire property. The author reviews some alternative methods of like-kind exchanges, which may not only provide new business opportunities for the hospitality owner, but lucrative tax benefits as well.

Hospitality IT: What Does the Future Hold?

The impact of information technology (IT) is far-reaching and driving dramatic shifts in business paradigms. Trends suggest greater adoption of IT will continue and develop at accelerating rates. Hence, hotel operators and executives must learn how to embrace IT and capitalize on the many capabilities it has to offer while minimizing the threats. The authors attempt to provide a sense of focus and a roadmap to help hoteliers understand the issues, see the future, and find an appropriate on ramp to the information superhighway.

Drug Abuse in the Hospitality Industry

Drug and alcohol abuse in the hospitality industry is an ongoing problem, reflective of business as a whole. A series of surveys were conducted at national drug rehabilitation centers seeking information from patients currently or formerly employed in the hotel and restaurant industry. The author identifies a number of problem indicators and makes recommendations relevant to resolutions.

Financial Failure In the Hospitality Industry

The hospitality industry (especially the restaurant segment) has a historically high rate of financial failures. Yet, financial failure in the industry has not received the attention it deserves. In this article, the authors identify basic reasons underlying failed ideas while presenting a study of several hospitality chains that have experienced varying degrees of financial failure. The characteristics and pitfalls of these companies provide the necessary groundwork to explore major lessons to be learned which should aid hospitality management to aviod future business failures.

Classroom Simulation is Computer Based

The authors review and evaluate the use of a business simulation, specifically he Hotel Operational Training Simulation (HOTS), in the fourth year of a hospitality undergraduate program. Four dimensions were explored: learning experience, alternative method of instruction, critical and analytical thinking ability and delivery time frame, in addition to the student overall satisfaction with the learning experience.

Benchmarking Quality Management in Hotels

In the early 1980s many hotels in the United States adopted quality assurance as a business strategy. By the late 1980s independent and chain hotels realized that total quality management (TQM) was a more powerful process and they began utilizing many of its components. For over 10 years, hotels have flirted with a variety of tools, processes, and theories to improve service to the guest

Generating an Online Bottom Line

E-commerce is an approach to achieving business goals through information technology and is quickly changing the way hospitality business is planned, monitored, and conducted. No longer do buyers and sellers need to engage in interpersonal communications for transactions to occur. The future of transaction processing, which includes cyber cash and digital checking, are directly attributable to e-commerce which provides and efficient, reliable, secure, and effective platform for conducting hospitality business on the web.

Think Like An Owner: Identifying the Characteristics that Are Important for Ownership-like Thought in the Hospitality Industry

Companies want recruits who “think like an owner”; that is, managers who demonstrate entrepreneurial aptitude and skills, think on their feet, and possess good problem-solving abilities. This exploratory study sought to identify the characteristics important for ownership-like thought in the hospitality industry. A questionnaire based on a review of entrepreneurship literature drew responses from 182 hotel and restaurant industry operators, executives, and owners. Results suggested six factors or characteristics that lead to ownership-like thought or behavior.

A Look Back To Look Forward: New Patterns In The Supply/Demand Equation In The Lodging Industry

In his dialogue entitled - A Look Back to Look Forward: New Patterns In The Supply/Demand Equation In The Lodging Industry - by Albert J. Gomes, Senior Principal, Pannell Kerr Forster, Washington, D.C. What the author intends for you to know is the following: “Factors which influence the lodging industry in the United States are changing that industry as far as where hotels are being located, what clientele is being served, and what services are being provided at different facilities. The author charts these changes and makes predictions for the future.” Gomes initially alludes to the evolution of transportation – the human, animal, mechanical progression - and how those changes, in the last 100 years or so, have had a significant impact on the hotel industry. “A look back to look forward treats the past as prologue. American hoteliers are in for some startling changes in their business,” Gomes says. “The man who said that the three most important determinants for the success of a hotel were “location, location, location” did a lot of good only in the short run.” Gomes wants to make you aware of the existence of what he calls, “locational obsolescence.” “Locational obsolescence is a fact of life, and at least in the United States bears a direct correlation to evolutionary changes in transportation technology,” he says. “…the primary business of the hospitality industry is to serve travelers or people who are being transported,” Gomes expands the point. Tied to the transportation element, the author also points out an interesting distinction between hotels and motels. In addressing, “…what clientele is being served, and what services are being provided at different facilities,” Gomes suggests that the transportation factor influences these constituents as well. Also coupled with this discussion are oil prices and shifts in transportation habits, with reference to airline travel being an ever increasing method of travel; capturing much of the inter-city travel market. Gomes refers to airline deregulation as an impetus. The point being, it’s a fluid market rather than a static one, and [successful] hospitality properties need to be cognizant of market dynamics and be able to adjust to the variables in their marketplace. Gomes provides many facts and figures to bolster his assertions. Interestingly and perceptively, at the time of this writing, Gomes alludes to America’s deteriorating road and bridge network. As of right now, in 2009, this is a major issue. Gomes rounds out this study by comparing European hospitality trends to those in the U.S.

Interrole Conflicts in the Hospitality Industry: The Role of Positive Affectivity as an Antidote

This study investigates the role of positive affectivity as a buffer against the detrimental effects of interrole conflicts on frontline hotel employees’ job performance and turnover intentions. Data collected from a sample of frontline hotel employees in Turkey serve as the study setting. Results and their implications are discussed, and directions for future research are offered.