Hospitality REITs and financial crisis: a comprehensive assessment of market quality

Pawan Jain, Spenser J. Robinson, Arjun J. Singh, Mark Sunderman

Research output: Contribution to journalArticlepeer-review

4 Scopus citations

Abstract

Purpose: The purpose of this paper is to examine market microstructure differences in stock market quality for hospitality real estate investment trusts (REITs) during the pre- and post-financial crisis eras. It provides insight on different trading strategies based on the underlying liquidity and volatility of hospitality REITs as compared traditional REITs and the broader market. Design/methodology/approach: The paper uses established microstructure measures for liquidity, trading volumes and risk assessment and compares daily and intraday trading patterns of REITs, hospitality REITs and the broad market. Findings: The results suggest a quicker recovery of performance for hospitality REITs and some fundamental increases in liquidity measures post-crisis. The results of the study highlight the differences in trading volumes, liquidity and risk profile of hospitality REITs compared to traditional REITs both in the pre- and post-financial crisis periods. Practical implications: The quicker recovery of hospitality REITs in key trading measures may suggest flight to quality during periods of high volatility. Originality/value: This study fills the gap in the literature relative to microstructure studies and provides information to help hotel firms and portfolio managers choose an appropriate organizational structure and investment vehicle, respectively.

Original languageEnglish
Pages (from-to)277-289
Number of pages13
JournalJournal of Property Investment and Finance
Volume35
Issue number3
DOIs
StatePublished - 2017

Keywords

  • Financial crisis
  • Hospitality
  • Liquidity
  • Market microstructure
  • REIT
  • Volatility

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