The years 2004 through 2007 witnessed a rush of takeover deals in the lodging industry, in which numerous publicly traded hotel companies and hotel real estate investment trusts (REITs) were acquired—mostly by private equity firms, in many cases, Blackstone Group.
Notwithstanding the suspension of such activities in the past two years, this article analyzes what factors determine the choice of the targets during that period in the lodging industry.
An examination of these takeover deals determined that targets were most likely to: (1) be either a large hotel company or a relatively small REIT; (2) have a high percentage of fixed assets and a low level of debt; (3) have a mismatch between growth prospects and available resources; and (4) be in their middle age as publicly traded firms.
Conditions that permit acquisitions, including availability of credit, will eventually return, making this analysis useful to current and future owners, investors, and executives in the lodging industry. Those who want to be acquired, for instance, can adjust their corporate profile to be more attractive, and those who wish to discourage acquisition can take on debt and spin off assets to be less attractive.
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www.hotelschool.cornell.edu/chr/pdf/showpdf/chr/research/acquisitions.pdf
About Qingzhong Ma Ph.D.
Qingzhong (Qing) Ma is an assistant professor of finance in the School of Hotel Administration. He teaches the sophomore core finance course for hotel students and advanced corporate finance, a senior elective course. He does research in corporate finance, especially mergers and acquisitions, divestitures, corporate restructuring, investment banking, institutional investors, corporate governance, capital market efficiency, and real options in hotel management, among others. Qing holds a PhD in finance and business economics from the Marshall School of Business at the University of Southern California, an MBA from University of Oklahoma and a Bachelor's degree in electrical engineering from Tsinghua University in Beijing, China.About Peng Liu Ph.D. 
Dr. Peng Liu, Assistant Professor of Real Estate, joined Cornell's faculty in 2007 after obtaining a Ph.D. in finance and real estate from the Haas Business School at University of California Berkeley. While obtaining his doctoral degree, Liu taught courses in stochastic calculus, credit risk and mortgage-backed securities. His primary research focuses on asset pricing and hedging in the real estate market, with specific interests in mortgage pricing, mortgage-backed securities and commodity futures research. Prior to his career in academics, Liu worked in various industries, including engineering, advertising, consulting and hedge funds.Your Comments PleaseIf this CHR Report made a positive impact on your management approach or business operations, we welcome your commentary. We would like to post your comments on our website. Please submit your comments to js372@sha.cornell.edu and rohit.verma@cornell.edu 
