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Thesis

French

ID: <

10670/1.wz7get

>

Where these data come from
Development of international hotel groups, hospitality real estate, and value creation processes

Abstract

The choice for hotel development modes is at the core of the current preoccupations of international hotel groups. They have few options to choose from: full ownership, franchise contracts, management contracts, or sale and leaseback contracts. The problematic raised in this dissertation is twofold: first, it wants to determine if asset light strategies, the less capital intensive development mode, create value for shareholders; second, it tries to compare and arbitrage between asset light and asset heavy strategies. The literature review is anchored on three theoretical pillars: the theory of the firm (transaction costs theory, property rights theory, agency theory, and model of resources and competencies), the financial theory, and the real estate theory. An analysis of the different development modes is conducted in the light of those theoretical inputs. The empirical analysis uses an experimental approach through a number of simulations that estimate the impact of both the macroeconomic and the sectoral environments on hotels’ performance and value creation processes. This analysis is performed using data from the US market and the upper upscale hotel segment. Simulations are supplemented with a statistical analysis aimed at, first, identifying the environments most likely to favor one or the other mode; and, second, at providing the grounds for a sound arbitrage between asset light and asset heavy strategies in conjunction with a risk/reward analysis. Measures of performance resulting from that study are completed with a thorough analysis of the value creation potential stemming from the two different hotel development modes.

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