An event study of the delisting of hospitality stocks in the United States

Managers make important corporate strategic investment decisions such as mergers and acquisitions to improve the long-term competitiveness of their organizations; while at times they may be forced to manage for the short-term in order to satisfy the demands from the stock market. However, there is a lack of empirical research to examine the short- versus long-term view of management decision-making. This study analyses the mergers and acquisitions activities in the hospitality industry and particularly, investigates delisting behaviour of publicly traded hospitality firms and whether companies exhibit distinct patterns before delisting. Consolidation is prevalent in a maturing industry such as hospitality which currently faces a fiercely competitive global environment. The results of the study show that there is substantial difference between hospitality and non-hospitality stocks: not much information leakage in the delisting of hospitality stocks and a marked increase in institutional holdings with time but significant information leakage in non-hospitality stocks as reflected by positive and significant abnormal returns.