Type of Document Master's Thesis Author Zeng, Yee URN etd-10242009-020356 Title Cost of capital :a practical model incorporated with risk assessment for hotel investments in the middle-price and economy segments Degree Master of Science Department Hotel, Restaurant, and Institutional Management Advisory Committee
Advisor Name Title Olsen, Michael D. Committee Chair Higinbotham, Randell W. Committee Member Kwansa, Francis A. Committee Member Keywords
Date of Defense 1993-05-05 Availability restricted AbstractHotel investments, which have far-reaching impact on hotel companies'
long term financial health, will continue to be the primary mode for hotel
companies' survival and growth. However, top management has been facing a
changing industry and investment community to which they are required to adapt.
Consequently, the old fashioned gut-feeling types of decision making are no
longer appropriate for sound hotel investments. It is the primary objective of this
study to develop a model for hotel investment risk assessment and appropriate
cost of capital estimation in the middle-price and economy hotel segments for the
investment's capital budgeting purposes.
The hotel investment risk assessment and cost of capital estimation model
research was conducted using the focus group interview, the Delphi Technique,
and the case study. As exploratory research, the focus group interview was
conducted with the participation of hotel executives and general managers, hotel
owners, and bank lenders from the Virginia area. Key investment risk factors were identified from the opinions of this panel, which represented different
perspectives and needs. The summary findings laid out the foundation of the
Delphi Technique survey_
The Delphi survey was conducted among hotel general managers, hotel
executives, and hotel owners within three hotel chains in Virginia, Maryland and
Delaware. They consisted of a professional panel of 19 members. The first task
accomplished by the panel was to further validate the key risk factor profile
developed by the focus group interview. The second task was to rate the level of
influence of the identified factors using a five point likert-type scale (5=very
influential, 1 = little influential). Three rounds of the survey allowed the panel
members to achieve a consensus on the issues.
A total of 36 hotel key investment risk factors in the middle-priced and
economy segments were agreed to be included in the investment risk assessment
framework. In addition, a ranking of all factors was produced based on each
factor's importance and influence level. All the factors received a higher than
average (rank scale 3) ranking. The empirical finding provided a valuable
franlework for the subjective risk assessment in the cost of capital estimation
Filename Size Approximate Download Time (Hours:Minutes:Seconds)
28.8 Modem 56K Modem ISDN (64 Kb) ISDN (128 Kb) Higher-speed Access LD5655.V855_1993.Z535.pdf 8.03 Mb 00:37:10 00:19:06 00:16:43 00:08:21 00:00:42next to an author's name indicates that all files or directories associated with their ETD are accessible from the Virginia Tech campus network only.
If you have questions or technical problems, please Contact DLA.