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Post-Merger Stock Performance of Acquiring Hospitality Firms

Author

Listed:
  • Jing Yang

    (School of Hotel and Restaurant Administration, Oklahoma State University, Stillwater, OK 74078, USA)

  • Woo Gon Kim

    (Dedman School of Hospitality, College of Business, Florida State University, 288 Champions Way, UCB 4116, Tallahassee, FL 32306, USA and International Scholar from Kyung Hee University, 1 Hoegi-dong, Dongdaemun-gu, Seoul 130-701, Republic of Korea)

  • Hailin Qu

    (School of Hotel and Restaurant Administration, Oklahoma State University, Stillwater, OK 74078, USA)

Abstract

This study examines the long-term post-merger stock performance of acquiring hospitality firms between 2000 and 2006 in the USA. The Jensen measure is used to investigate the long-term financial performance of acquiring hospitality firms. A sample of 15 hospitality companies with 8 lodging REITs and 7 hotel/casino companies is analysed. The companies' stock performances are compared against indices of related hotel and REITs sectors and against the S&P 500 index. The study generates mixed findings. The results showed significant positive gains for the acquiring firms when compared to the S&P 500 index; yet, the acquiring firms failed to generate significant gains when compared to sector indices. Furthermore, the REITs firms performed less well than the hotel/casino firms when compared against both market and sector indices.

Suggested Citation

  • Jing Yang & Woo Gon Kim & Hailin Qu, 2010. "Post-Merger Stock Performance of Acquiring Hospitality Firms," Tourism Economics, , vol. 16(1), pages 185-195, March.
    • Handle: RePEc:sae:toueco:v:16:y:2010:i:1:p:185-195
    DOI: 10.5367/000000010790872231
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    Cited by:

    1. Verma, Shubham Kumar & Kumar, Satish, 2024. "Fractal dimension analysis of financial performance of resulting companies after mergers and acquisitions," Chaos, Solitons & Fractals, Elsevier, vol. 181(C).
    2. Seongsu David Kim, 2023. "The valuation effects of hotel mergers," Tourism Economics, , vol. 29(2), pages 348-377, March.
    3. 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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