Research Note: US Lodging Firms' Exposure to Energy Price Risk

Seul Ki Lee and SooCheong (Shawn) Jang
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Seul Ki Lee: College of Hospitality and Tourism Management, Sejong University, 98 Gunja-Dong, Gwangjin-Gu, Seoul 143-747, Republic of Korea
SooCheong (Shawn) Jang: School of Hospitality and Tourism Management, Purdue University, Marriott Hall, 900 West State Street, West Lafayette, IN 47907, USA

Tourism Economics, 2015, vol. 21, issue 5, 1095-1102

Abstract: To date, studies on hotel energy use have examined the implications in terms of direct cost savings, environmental sustainability and corporate social responsibility. However, as the profitability of lodging firms is subject to changes in energy prices, their value may depend on exposure to energy price volatility. This paper examines the exposure of US lodging firms to energy price risk between 2001 and 2014. The authors find that energy price considerably affected stock returns of lodging firms throughout the sample period, and conclude that participation in an energy saving programme reduces the lodging firm's stock return exposure to energy price risk, thereby enhancing firm value.

Keywords: energy price risk; stock-return exposure; arbitrage pricing theory (APT); multifactor model (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:sae:toueco:v:21:y:2015:i:5:p:1095-1102

DOI: 10.5367/te.2014.0400

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