What does this research mean for the field?

In U.S. hotel and restaurant firms, higher capital expenditure intensity is positively associated with subsequent accounting performance and long-term value creation, particularly for asset-heavy hotels, though it is accompanied by heightened short-term investor uncertainty and must be balanced against the negative impacts of leverage. Novelty: ClaimNovelty.INCREMENTAL. Consensus alignment: ConsensusAlignment.NEUTRAL.

What question did this study set out to answer?

To examine how capital expenditure intensity and financial leverage jointly influence accounting performance and equity return risk in publicly listed U.S. hotel and restaurant corporations.

August 30, 2026Cornell Hospitality QuarterlyOpen Access

Investing Through Turbulence: Capital Expenditure, Leverage, and the Persistent Performance of Hotel and Restaurant Firms

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Authors

MGMahala GeronassoRoche (Switzerland)

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Implication

Panel data analysis demonstrates that higher capital expenditure improves accounting performance in hospitality firms, indicating trade-offs with leverage and market volatility.

Key Points

To examine how capital expenditure intensity and financial leverage jointly influence accounting performance and equity return risk in publicly listed U.S. hotel and restaurant corporations.
Analyzed panel data from 2013 to 2023 for 67 publicly listed U.S. corporations (23 hotel and 44 restaurant firms; 78% asset-heavy property owners).
Estimated firm-level regressions evaluating lagged CAPEX intensity and leverage alongside firm size, sales growth, and operating cash flow.
Conducted portfolio-level time-series autoregressive and Generalized Autoregressive Conditional Heteroskedasticity (GARCH) modeling to assess performance persistence and return volatility.
Higher CAPEX intensity was positively associated with subsequent return on assets, EBIT/total assets, liquidity ratios, and market-to-book values, with effects substantially stronger in asset-heavy hotel firms than in restaurant firms or asset-light franchisors.
Financial leverage exhibited an inverse association with accounting performance metrics, particularly within capital-intensive, asset-heavy hotel corporations.
GARCH models demonstrated persistent volatility clustering in risk-adjusted equity returns, showing that aggressive investment programs coincide with prolonged periods of heightened investor risk.

Cite This Study

Mahala Geronasso (2026) studied this question.

synapsesocial.com/papers/6a93f0f56c1a8fb52e79d8eb https://doi.org/10.1177/19389655261481130

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Implication

Panel data analysis demonstrates that higher capital expenditure improves accounting performance in hospitality firms, indicating trade-offs with leverage and market volatility.

Investing Through Turbulence: Capital Expenditure, Leverage, and the Persistent Performance of Hotel and Restaurant Firms

Discussion

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Implication

Key Points

Cite This Study

Investing Through Turbulence: Capital Expenditure, Leverage, and the Persistent Performance of Hotel and Restaurant Firms

Discussion

Member takes

Implication

Key Points

Cite This Study

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