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Financial impact of partnerships on hospitality firms

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  • Dewally, Michaël
  • Gordon, Rachel

Abstract

In the United States, over 60% of publicly traded firms in the hospitality industry engage in a formal partnership such as a joint venture or a strategic alliance at one point in time. We study the impact of these formal partnerships on firm market return, performance, risk, and sales. Overall, the financial market reacts positively to these partnerships with positive initial market reactions upon announcement as well as higher valuation. Participating in a venture or alliance increases a firm's financial risk, as measured by cash flow, operating, and stock volatility. Further, while there is a negative impact to firm financial performance, there is an increase in sales, particularly for ventures.

Suggested Citation

  • Dewally, Michaël & Gordon, Rachel, 2022. "Financial impact of partnerships on hospitality firms," Annals of Tourism Research, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:anture:v:95:y:2022:i:c:s016073832200086x
    DOI: 10.1016/j.annals.2022.103435
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    1. Nicolau, Juan Luis & Sharma, Abhinav, 2022. "A review of research into drivers of firm value through event studies in tourism and hospitality: Launching the Annals of Tourism Research curated collection on drivers of firm value through event stu," Annals of Tourism Research, Elsevier, vol. 95(C).

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