Current Search:   Semrad, Kelly (x)

View All Items

  • CSV Spreadsheet
(1 - 2 of 2)
DISCOUNTING: AN EMPIRICAL JUSTIFICATION FOR ITS VALUE IN THE LODGING INDUSTRY
Title
DISCOUNTING: AN EMPIRICAL JUSTIFICATION FOR ITS VALUE IN THE LODGING INDUSTRY.
Creator
Semrad, Kelly, Croes, Robertico, University of Central Florida
Abstract / Description
The central focus of this study is to provide an empirical explanation regarding the efficacy of the managerial expectation formation process as it contributes to the understanding of discounting room rates as a rational strategic phenomenon in the lodging industry. The study assesses the nature of the relationship between discounting hotel room rates and hotel financial performance when considering the non-stationary conditions of a time series data set. The study was rooted in an...
Show moreThe central focus of this study is to provide an empirical explanation regarding the efficacy of the managerial expectation formation process as it contributes to the understanding of discounting room rates as a rational strategic phenomenon in the lodging industry. The study assesses the nature of the relationship between discounting hotel room rates and hotel financial performance when considering the non-stationary conditions of a time series data set. The study was rooted in an operational based perspective with regard to the challenges presented by the perishable nature of room night sales - the loss of which may impact a managerÂÂ's fundamental responsibility: to generate maximum revenue from the existing hotel room capacity. Of critical importance to this study is whether the incremental use of discounting room rates could work to correct for temporal periods of decreased demand and thus increase short-term hotel financial performance. There is limited research regarding the empirical relationship between discounting room rates and hotel financial performance, as well as the internal process that a hotel manager uses to determine an accurate room rate that corresponds to seasonal lodging market demand conditions. An empirical foundation for this practice is lacking in the extant hospitality literature. Literature reveals that, although the lodging industry commonly incorporates discounting as a pricing strategy, recent research implies that high occupancy levels at discounted room rates do not necessarily lead to an increase in hotel financial performance. The contrast then between what is practiced and the recommendations from pricing strategy studies has led to lack of consistent agreement in current lodging literature regarding how discounting of hotel room rates relates to hotel financial performance. This study is at the forefront in its use of the methodological procedures that support a theoretical framework capable of providing explanations regarding managersÂÂ' internal process of discounting as an effective pricing strategy that could compensate for times of decreased room demand. An econometric case study research design was used in conjunction with a cointegration analysis and an error correction model (none of which are otherwise appropriated as assessment tools in the lodging industry). These applications provide a means to understand the expectation formation process of managersÂÂ' room price setting strategies. They also assess the empirical nature of the relationship between the variables by accounting for the erratic variations of room demand over time as induced by random error fluctuations. A non-deterministic system was assumed and supported through the analysis of the stationarity conditions of the time series data set under investigation. The distinguishing characteristics of a dynamic system that are recognized as traits of the lodging industry are further supported by the theoretical framework of the rational expectations theory and the cobweb model. The results of the study are based on secondary financial data sets that were provided by a midscale independently owned leisure hotel in the Orlando, FL market and that is located on Walt Disney World property. The results of this study delineate from the current normative economic recommendation based on descriptive research that claims discounting hotel room rates does not increase hotel financial performance. The current study does not draw an association between the variables from the presupposition of a deterministic marketplace, nor does it recommend to managers to hold a constant average daily rate over time. Based on the findings of the statistical procedures performed and the theoretical framework, the study contends that previous research may have incorrectly modeled room price expectations; elected to use inappropriate statistical tests; and, therefore, may have entertained misleading conclusions regarding the relationship between discounting of hotel room rates and hotel financial performance. Through use of an error correction model, the major findings of this study imply several concepts: that residuals may be treated as a variable within the studyÂÂ's model in order to better understand the short run dynamics that may lead to equilibrium correcting room price positions over the long run of time; that discounting room rates works in the short run; and, that managers use a rational price setting strategy to set future room rates. All of the aforementioned concepts fall within accordance of the rational expectations theory. The study concludes that while the constant room rate adjustments observed in the lodging industry may display what appears to be a random structure that deviates from the expected systematic, or stable, financial performance of a hotel over time, the deviations in performance are actually a rhythmic synthesized process of market information from past and current times. Hence, hotel managers appear to be using a backward looking model to forwardly project optimal room rates to match uncertain consumer demand. The empirical assessment employed in this study supports this determination.
Show less
Date Issued
2010
Identifier
CFE0003430, ucf:48411
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0003430
Conditions Associated with Increased Risk of Fraud: A Model for Publicly Traded Restaurant Companies
Title
Conditions Associated with Increased Risk of Fraud: A Model for Publicly Traded Restaurant Companies.
Creator
Yost, Elizabeth, Croes, Robertico, Severt, Denver, Robinson, Edward, Murphy, Kevin, Semrad, Kelly, Jackson, Leonard, University of Central Florida
Abstract / Description
The central focus of this dissertation study is to understand the impact of the Sarbanes-Oxley Act and the factors that contribute to increased risk of fraud in order to determine why fraud may occur despite the imposed regulation of the Sarbanes-Oxley Act. The main premise of the study tests the application of the fraud triangle framework constructs to publicly traded restaurant companies during the time period of 2002-2014, using proxy variables defined through literature. Essentially, the...
Show moreThe central focus of this dissertation study is to understand the impact of the Sarbanes-Oxley Act and the factors that contribute to increased risk of fraud in order to determine why fraud may occur despite the imposed regulation of the Sarbanes-Oxley Act. The main premise of the study tests the application of the fraud triangle framework constructs to publicly traded restaurant companies during the time period of 2002-2014, using proxy variables defined through literature. Essentially, the study seeks to identify the factors that may provide the optimal criteria to engage in fraudulent or opportunistic behavior. The fraud triangle theoretical framework is comprised of the constructs of pressure, opportunity and rationalization, and has mostly been utilized by external auditors to assess the fraud risk of various companies. It has never been applied to the restaurant industry, and the proxy variables selected have never before been tested in a comprehensive model. Thus, a major contribution of this study may enable executive managers to assess the fraud triangle conditions according to the model in order to afford conclusions regarding increased risk of fraud. The study first hypothesized that the Sarbanes-Oxley Act has had a significant impact on detecting increased risk of fraud for publicly traded restaurant companies. Additionally, the study controlled for and tested the proxy variables of the fraud triangle constructs to determine if any of the variables had a significant impact on detecting increased risk of fraud for publicly traded restaurant companies. The variables tested included company size, debt, employee turnover, organizational structure, international sales growth, executive stock compensation, return on assets, the Recession, and macro-economic factors of interest, inflation, and unemployment rates. The research study adopted an exploratory research design using the case of publicly traded United States restaurant companies in order to provide a better understanding of the characteristics that may contribute to increased fraud risk. The study assumed a binary distribution of the dependent variable, increased fraud risk, measured by the incidence of a reported internal control deficiency over the testable time period. Specifically, the study employed a probit model to estimate the probability that an entity or company will be at an increased risk of fraud based on the independent variables that support and are linked to the fraud triangle framework. Additionally, the model assumes equal weight to the variables of the fraud triangle framework. Through use of the probit model, the major findings of the study were as follows: First, the Sarbanes-Oxley Act does have a significant impact on highlighting areas of increased fraud risk for publicly traded restaurant companies. Second, for the total population of restaurant companies, only the Recession, interest rates, inflation rates and unemployment rates are significant indicators of increased fraud risk. None of the internal variables were significant. However, once the data was segmented by type of restaurant, the results revealed significance of both internal and external variables. These results imply a couple of theoretical notions: first, that the Sarbanes-Oxley Act is an effective means for detecting risk of fraud for publicly traded restaurant companies when considering variables that support the fraud triangle; second, that the fraud triangle is contextual when applied to the restaurant industry because only the variables that are outside of managements control were significant. Finally, from a managerial perspective, the study provides evidence that macro-economic conditions that might affect consumer demand may increase the risk of fraud for publicly traded restaurant companies.
Show less
Date Issued
2015
Identifier
CFE0005745, ucf:50101
Format
Document (PDF)
PURL
http://purl.flvc.org/ucf/fd/CFE0005745