Microsoft Word 2007 ichrie conference Proceedings Final-Final 06-06-07. doc

 
2007 Annual International CHRIE Conference & Exposition 
433
THE INTEREST RATE EXPOSURE OF LODGING FIRMS 
Amrik Singh 
School of Hotel, Restaurant and Tourism Management 
University of Denver 
Denver, CO, USA 
ABSTRACT 
 
The purpose of this study is to investigate the interest rate exposure of lodging firms and whether the use of 
derivatives reduces this exposure In a sample of 47 lodging firms from the period from 2000-2004, the first stage 
results show that most publicly traded lodging firms face zero exposure to interest rates. In the second stage, a 
significant decline in exposure is observed from the use of interest rate derivatives even after controlling for other 
exposures. Firm size, floating rate debt, interest coverage ratio, and foreign sales ratio are also found to be 
important determinants of exposure.