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Strategy and International Business Group

Dr Abuagila Almahdi

Research Topic

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

Supervisor

Assistant Professor Hossam Zeitoun
Strategy & International Business Group

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.