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Michigan State University Research Website: 2011 Lodging
Market Potential Index Available

Facilitates a Relative Comparison of the 25 Largest Lodging Markets Along Ten Dimensions

(November 2, 2011, East Lansing, Michigan) - MSU’s research website recently featured the Lodging Market Potential Index, a joint research project between The School of Hospitality Business, MSU-CIBER, and globalEDGE.  As a first step in hotel development, investment, and 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 markets (as tracked by Smith Travel Research) along ten dimensions.   Dimensions are measured using 30 different indicators and are weighted to determine their 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
  • to INSPIRE continuous learning by empowering present and future managers to ACQUIRE knowledge, skills, and global Hospitality Business leadership positions
  • to CREATE knowledge by engaging in collaborative theoretical and applied research for the benefit of undergraduate and graduate students, Hospitality Businesses, and the community of hospitality management scholars
  • to ENGAGE our Hospitality Business partners through outreach and service, and to ENHANCE global Hospitality Business economic, community, and academic development and
  • to CONTINUOUSLY IMPROVE The School's global leadership position in Hospitality Business operations, development, ownership, and management.
The First, The Original, and STILL The Leader…The School of Hospitality Business.  We are The School™.

For more information, please visit us at http://www.bus.msu.edu/shb/
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Contact:

Lena Loeffler
517-353-9211
shbpr@bus.msu.edu
 
 

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Students at The School of Hospitality Business at Michigan State University Produce 60th Annual Les Gourmets Evening of Fine Dining for 200 Guests / April 2011

The 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

Spring 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

The 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

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