Identification of Merger and Acquisition Waves and Their Macroeconomic Determinants in the Hospitality Industry [Summary]

Abstract

The contribution of this study is to provide practical implications for hospitality owners or executives who seek M&A. They should take the findings into account when formulating and implementing their M&A strategy to improve operating performance and shareholder value. The findings show that macroeconomic conditions encourage hospitality M&A deals and the shifts in the important macroeconomic conditions over M&A processes from internal review of strategic options to deal announcement. These macroeconomic conditions should be checked continuously to determine whether economic conditions are appropriate for conducting M&A deals. Hospitality practitioners can also adjust the details of their M&A deals by looking into different macroeconomic conditions at each step of the M&A process. Furthermore, practitioners are able to use the conditions to predict a proper time for M&A. The findings would also be beneficial for financial analysts and investors. The combination of the significant effect of four macroeconomic factors can help identify the period of hospitality M&A waves. Based on the unique impact of macro-economy in the hospitality industry, financial analysts can develop a creative industrial forecast to show feasible projections of M&A deals; and, investors and fund managers can find out the optimal time for investing in the hospitality industry.