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Article
Earnings Announcements in the Hospitality Industry: Do You Hear What I Say?
Center for Hospitality Research Publications
  • Pamela Moulton, Cornell University
  • Di Wu
Document Type
Article
Publication Date
8-3-2012
Abstract
This study examines how the stock prices of publicly traded hospitality firms respond to quarterly earnings announcements. We find that after the initial price reaction to unexpectedly good or bad news, stock prices continue to drift in the same direction for up to 20 trading days following an announcement, suggesting that the new information is incorporated into prices gradually. Although this implies that hospitality stock prices are not perfectly efficient, we note that the prices of hospitality stocks generally appear more efficient than stock prices in the broader market, where drifts lasting up to 60 trading days are common. Similarly, we find that stock analysts are somewhat slow in revising their forecasts for future earnings in the hospitality sector, but this result is less pronounced than in the broader market.
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© Cornell University. This report may not be reproduced or distributed without the express permission of the publisher
Citation Information
Moulton, P., & Wu, D. (2012). Earnings announcements in the hospitality industry: Do you hear what I say? [Electronic article]. Cornell Hospitality Report, 12(11), 6-10.