Program Web Address
www.fau.edu
Abstract
Estimating the required rate of return for hotel properties is a daunting task because a lodging property is considered a hybrid between a real estate asset, and a revenue-generating enterprise affiliated with a hotel brand. Computing the expected rate of return for a hotel becomes even more complicated when a third party foreign investor/entrepreneur is the one performing the computation for an investment hotel in an emerging country. This clinical case illustrates the challenges surrounding the estimation of a project’s cost of equity in the multinational hotel industry. The results reveal that estimating cost of equity in emerging markets for hotel investments continues to be a conundrum. Future investors should make multiple adjustments and use several models when making their capital investment decisions.
Recommended Citation
Madanoglu, Melih
(2011)
"Entrepreneur's Dilemma: Hotel Investments in Emerging Markets,"
Hospitality Review: Vol. 29:
Iss.
2, Article 4.
Available at:
https://digitalcommons.fiu.edu/hospitalityreview/vol29/iss2/4
Included in
Business Administration, Management, and Operations Commons, Entrepreneurial and Small Business Operations Commons, Growth and Development Commons, Hospitality Administration and Management Commons, International Trade Law Commons, Real Estate Commons
