June 2021 Editors’ Letter

As we approach the summer of 2021, the COVID-19 pandemic is still at the forefront of the hospitality industry.  The hospitality industry is beginning to regain its momentum and is moving towards a path of recovery, driven by rising expectations and pent-up leisure demand in the midst of increasing vaccinations and declining infection rates.  For this Special Issue of the Boston Hospitality Review, we are pleased to present several articles from leading academics covering a diversity of issues in finance and real estate affecting the lodging and restaurant sectors.  Topics addressed in this special issue include the impact of COVID-19 on hospitality business operations and asset management, the current state of lodging financial distress, strategic advantages of the asset-light business model, decentralized finance as an emerging financial technology, the effectiveness of IT-related hotel investments, and gender diversity. 

The decision to go public or private is an important decision for all stakeholders in the restaurant industry. In a well-crafted and informative study, Dr. Melih Madanoglu, Ph.D., Professor at the Kennesaw State University, and Dr. Ersem Karadag, Ph.D., Professor at the Robert Morris University, share with us the privatization phenomena in the restaurant industry over the recent decades and explain the reasons of going private decision. 

Dr. Murat Kizildag, Ph.D., Associate Professor at the University of Central Florida, tackles the decentralized finance (DeFi) phenomenon, discusses the growing importance of this emerging financial technology in business, and lastly shares his views as to how DeFi finds its applications in the hospitality industry.  

Gender diversity in the upper echelons has been a growing interest for industry practitioners and academic researchers. Dr. Ozgur Ozdemir, Ph.D.,  Assistant Professor at the University of Nevada Las Vegas, highlights the role of gender diversity in senior/executive positions and presents findings for some recent research. 

The asset-light business has been increasingly popular in the hotel industry with a focus on management contracts and franchising in pursuing growth strategies. Dr. Kwanglim Seo, Ph.D., Associate Professor at the University of Hawaii, discusses the benefits of this business strategy and the competitive advantages it offers in the midst of the COVID-19 pandemic. 

It is a well-known fact that the hotel and restaurant sectors bore the brunt of the COVID-19 pandemic head-on with significant negative financial impact on an unprecedented global scale. A.J Singh, Ph.D., Professor at the University of Texas Rio Grande Valley, and Bing Wang, Ph.D., Associate Professor at the Harvard University Graduate School of Design, compile and synthesize the prevailing academic and industry reports on the impact of COVID-19 on the hospitality industry, focusing on how the hospitality industry is adapting and changing its business operations and asset management strategies in coping with the crisis. 

A related impact of the COVID-19 crisis on hotels has been an increase in the number of hotels that have fallen into financial distress, raising concerns about the severity of the distress and how the distress is being resolved. In this regard, Dr. Amrik Singh, Ph.D., Associate Professor at the University of Denver, highlights some previous research findings on financial distress and provides insights on the current state of hotels in financial distress during the pandemic with potential implications for hotel owners and sponsors. 

The dramatic surge in the use of technology during the COVID-19 pandemic is unlikely to diminish but more likely to increase in the foreseeable future, requiring a greater use of technology in all aspects of the hotel business to enhance the guest experience. Finally, we highlight an article by Marcos Medeiros, Ph.D., Doctoral Candidate, Nan Hua, Ph.D., Professor, Arthur Huang, Ph.D., Assistant Professor, respectively at the University of Central Florida, and Agnes DeFranco, Ed.D., Professor at the University of Houston, on the effectiveness of IT-related investments across different types of hotel operators, providing insights on the importance of these investments in generating a high financial return.  

It is our hope to inform and provide relevant insights that will shed light on the path forward furthering our strong belief that hospitality, in the larger sense, is a valuable asset class, from both a financial point of view and for our society.