Amrik Singh
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Amrik Singh is an associate professor in the Fritz Knoebel School of Hospitality Management at the Daniels College of Business, where he teaches courses in advanced revenue management, cost management, lodging valuation and feasibility studies. Singh’s research focuses on financial statement analysis, capital structure, lodging real estate and commercial mortgage-backed securities (CMBS). His work has been published in the Journal of Hospitality and Tourism Research, International Journal of Hospitality Management and Cornell Quarterly, among others. He is a member of I-CHRIE and AHFME and serves on the editorial board of the Journal of Hospitality and Tourism Research.
What do you study, and what brought you to that topic?
My current research stream focuses on lodging real estate, especially CMBS mortgage debt financing, and hotel financial distress—hotels that fail or become distressed due to economic conditions. Hotels that go into foreclosure are usually disposed of at heavily discounted prices. My research aims to find drivers of distress and strategies to mitigate their financial distress.
What drove interest in this stream was the financial crisis of 2008-09. One of the reasons that hotels were so affected during that time is because of their difference from other types of real estate properties. Hotels are leased daily, unlike other property types with fixed, long-term leases. Hotels are essentially operating businesses housed in real estate, whereas if you look at an office building or retail building, it’s just real estate. The hotel business is much more complex with multiple operating departments that require expert management. You need to spend more on capital expenditures to improve the properties, which creates a lot of uncertainty in cash flow. This all makes hotel real estate more interesting and different from other commercial property types.
Which methodologies do you use in your research?
I utilize a lot of secondary data in my research. We have subscriptions to the STR Share Center, Costar and Trepp. Trepp is a company that tracks securitized loans for all property types, agency and non-agency, from origination until disposal. I use hotel financial performance and CMBS hotel loan data from Trepp and STR to build my datasets. There is a lot of cleaning and manipulation to be performed before I can start performing any analysis. I employ cross-sectional and panel data multiple regression methodologies to analyze the data in Stata.
How do you integrate your research into the classroom?
We revised our curriculum to offer a lodging real estate concentration in which I teach. In two classes—Lodging Valuation Principles and Lodging Development and Feasibility—I utilize the Costar database, STR Share Center reports and CMBS data as part of real-world, live projects for students. My research coexists with these courses and what I learn in my research is shared and taught to students.
Bringing students to the center of the industry also provides great exposure to the market. Just last month, we took students to the Americas Loding Investment Summit conference in Los Angeles. This is a conference that brings together all the major hotel companies, CEOs, brokers, owners and managers to discuss the issues and trends affecting the lodging industry. Our students can work at the conference as ambassadors or at various registration and information desks. It is a great opportunity for them to meet and listen to the CEOs of Marriott or Hilton or Hyatt. They get a chance to speak with the major industry players which can potentially turn into an interview for a position in the company.
How would you like to see your research impact the business community?
Ideally, we would be finding solutions for hotels to mitigate financial distress before having to resort to foreclosure. My research shows less costly disposal options could include a short sale, an auction sale or a note sale if distress cannot be resolved. If you let the lender take over the hotel, the property is going to be sold at a greater discount and the hotel owner is worse off. Speaking of discounts, my research also suggests that it is best for hotels to raise or maintain room rates to maximize revenue performance instead of discounting rates in the midst of an external shock.
At a policy level, the federal government is currently trying to address appraisal bias in the residential market but not the commercial real estate sector. I am hoping that my research on appraisal bias in the commercial real estate market will highlight the extent of the problem in that sector, so any federal policy formulated for the residential sector will be extended to the commercial real estate sector.