Resumen de The impact of the bidder parameter on the price paid for acquisition transactions in the hospitality industry
This thesis examines the impact of the type of bidder (i.e. buyer) parameter on the market value of a hotel business. It analyses the relationship between hotel market value and type of buyer. The scope of analysis covers the sale transactions reported in the MergerMarket database, world-wide, over a ten-year period (1998-2008). The base of comparison was the EBIDTA multiple paid for their transaction because a. the EBITDA multiple is the appraisal method mostly used in Mergers and Acquisitions in general, (and in the hotel industry in specific) and b. it provides a more suitable comparison on a standalone basis than other variables. Four buyer types (hotel companies, financial institutions, conglomerate concerns and real estate companies) were examined, the premise being that different buyer types pay different EBITDA multiples. For the analysis of the data we performed, a. cleansing of the database data to ensure reliable and homogeneous data, b. exploratory statistics to check for Normality of the data and to determine consistency among the main statistical parameters, and c. Analysis of Variance statistics (ANOVA), considered by statisticians the most adequate method for this kind of analysis (comparison of one variable, i.e. EBITDA multiple, among different groups, i.e. four investor groups). We have examined the data using Excel and SPSS software, that provide statistical tools of the latest generation, widely approved in the scientific and academic world. The ANOVA analysis depicted a statistically significant difference in the EBITDA multiple paid by the different buyer groups in the North American market whereas this was not the case for other examined parts of the world. The Contrast analysis for the North American market showed that the difference stemmed from the 'financial institutions' and 'conglomerate concerns'. These buyers paid higher and lower multiples respectively than 'hotel' and 'real estate' companies. The same analysis further showed that 'hotel' and 'real estate' companies behaved as a single group, i.e. paid similar multiples.
In order to accommodate our results to a practical framework, we accompany our findings with a discussion of the potential reasons behind the established differences in the prices paid. Finally, we use these findings to suggest a model of how the EBITDA valuation methodology can be adjusted to take into account the bidder type parameter. This doctoral study adds a new dimension to hotel properties' price setting; the type of buyer. This topic is almost untouched in terms of academic research and of significant interest for the hotel industry as even relatively small EBITDA multiple variations can result in important price differences, especially in the upper range of hotel transactions.
