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.
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