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Strategy and International Business Group

Abuagila Almahdi

Research Topic

“A Critical Evaluation of the Factors Driving Shareholder Value in the Hospitality Industry: A Case Study of Corinthia Group”

Supervisor

Hossam Zeitoun

Summary of Research Area

Abuagila’s research critically examines the factors influencing shareholder value within the hospitality industry, focusing on the strategic choices between asset-heavy and asset-light business models. This case study of Corinthia Group explores how ownership structures and macroeconomic disruptions, including the COVID-19 pandemic, affect financial and market performance.

This study involves:

  • Exploration of Strategic Models: Analysing the effects of asset-heavy versus asset-light strategies on shareholder value and their financial/market performance implications.
  • Ownership Structure and Performance Dynamics: Investigating the relationship between ownership concentration, tangible asset preferences, and shareholder returns using metrics such as ROE, ROA, and the Tobin Q ratio.
  • Impact of Macroeconomic Factors: Evaluating how disruptions, including COVID-19, influence the asset strategy-shareholder value relationship.
  • Development of a Practical Framework: Proposing actionable insights for stakeholders to address strategic challenges, conflicts, and investment decisions.
  • This research employs a mixed-methods approach, combining qualitative interviews with 30 Corinthia Group stakeholders and quantitative analysis of 187 international hotels from 2010 to 2022.

    Key Findings
  • The findings contribute to theoretical understanding and practical applications in the field by:
    Identifying the superior shareholder value generated by asset-light companies.
  • Highlighting the preferences of institutional shareholders for asset-heavy models.
  • Uncovering the limited impact of the COVID-19 pandemic on the asset strategy-shareholder value relationship.
  • The research also emphasises areas for future exploration, such as the role of dividend payouts in mitigating shareholder conflicts and addressing gaps in data availability from privately owned, unlisted hotels.