News for the Hospitality Executive
2011, East Lansing, Michigan) - MSU’s
research website recently featured the Lodging Market Potential Index,
research project between The School of Hospitality Business, MSU-CIBER,
and globalEDGE. As a first step in hotel development, investment,
acquisitions, the L-MPI© identifies market areas that show
long-term potential for hotel investment. It enables hotel owners and
developers to conduct a relative comparison of the 25 largest lodging
(as tracked by Smith Travel Research) along ten dimensions.
are measured using 30 different indicators and are weighted to
contribution to the overall market potential index. The Lodging Market
Potential is based on a scale of 1 to 100.
The index was developed by Dr. AJ Singh, associate professor in The School; Dr. Ray Schmidgall, Hilton Hotels professor of Hospitality Financial Management in The School; and Dr. Tunga Kiyak, managing director of MSU’s Center for International Business Education and Research (CIBER). Dr. Singh says this year’s L-MPI© shows that while the hotel market in Detroit ranks close to the bottom of the 25 markets studied, it has nonetheless improved.
According to MSU’s website, the index indicates that Detroit’s tourism has been steadily improving over the last five years and its hotel market supply (room inventory) and absorption (new hotel pipeline) ratio is also relatively positive. Steve Marx (BA ’87), owner of Hotel Source, Inc. and a member of MSU’s Hospitality Business Real Estate Advisory Council, explains, “A low ranking in MSU’s Lodging Market Potential Index does not mean a particular market has bad investment opportunities. It might mean the opposite. Top-ranked cities have more buyer competition, resulting in lower capitalization rates and lower returns on investment. Many of the low-ranked cites can offer much more attractive investment opportunities.”
Unveiled in Chicago in the Summer of 2009 at the Midwest Lodging Investors Summit (MLIS), for which The School serves annually as academic partner, the index is a systematic and formal analysis developed with the aid of MSU’s Hospitality Business Real Estate Advisory Council members. They helped determine the ten dimensions, associated indicators and their corresponding weights. To measure the performance of each dimension, objective, credible, reliable and quantifiable indicators were identified and are listed below the index.
While the web-based, interactive tool was originally devised as a teaching tool for students in The School of Hospitality Business, the researchers think it could help lodging industry developers and investors and owners conduct a relative comparison of the market potential of various metropolitan areas. Dr. Singh says, “"...this index will provide both business and civic leaders with a way to assess the attractiveness of their community to new investment.”
To examine this year’s L-MPI©, go to Michigan State University’s website; click “research” and then “stories.” You may also use http://globaledge.msu.edu/lmpi.
About The School of Hospitality Business at Michigan State University: We are The School
Recognized as the top-ranked hospitality business school, The School has a unique and independent position within Michigan State University’s Eli Broad College of Business at Michigan State University. Celebrating its 85th anniversary year in 2012, The School has almost 10,000 graduates worldwide, including a number of leading academicians and industry executives who have earned both undergraduate and graduate degrees. Founded in 1927, The School offers an exceptionally well-crafted curriculum, taught by innovative professors who are leading textbook authors, sought-after consultants, and respected researchers.
WE ARE THE SCHOOL™
The mission of The School is
For more information, please visit us at http://www.bus.msu.edu/shb/
School of Hospitality Business Alumni Association at Michigan State
University Honors Two Alumni with Lifetime Achievement Awards;
Hospitality Educators Dr. H.A. “Andy” Divine (BA ’60) and Professor
George Alley (BA ’59) Recognized / August 2011
at The School of Hospitality Business at Michigan State University
Produce 60th Annual Les Gourmets Evening of Fine Dining for 200 Guests
/ April 2011
School of Hospitality Business at Michigan State University Establishes
a Real Estate Development Institute to Focus on Hospitality Business
Real Estate Development and Ownership / February 2011
2010 Graduates of Michigan State's School of Hospitality Business Hear
Kellogg Hotel's General Manager Joel Heberlein Speak; Student Remarks
Given by The School’s Outstanding Senior Alexandra Clark / May 2010
|Richard Farrar, VP of Owner & Franchise Services for Marriott International, Captures the Attention of MSU Students in The School of Hospitality Business / February 2010|
School of Hospitality Business at Michigan State University Receives
Initial Grant from the J. Willard and Alice S. Marriott Foundation in
the Amount of $1.3 million for the $5.8 million Culinary Business
Learning Lab Revitalization Project / August 2008