A Longitudinal Study of Equipment Leasing in the U.S. Lodging Industry

Abstract

ABSTRACT This paper examines the current equipment leasing practices in the U.S. lodging industry and compares these practices to leasing practices in the U.S. lodging industry in 2000 as identified in an earlier study by Schmidgall and Upneja (2001). It compares the features of leases that make them attractive for today's hotel companies with the features that made leases attractive in 2000. In the previous study Schmidgall and Upneja revealed the major reasons for leasing included protection from obsolescence, securing tax advantages, and ensuring uniform cash outflows. For the current study, a similar questionnaire was sent to 500 members of HFTP associated with the lodging industry. This time, the researchers found that the major reasons for leasing are (1) to keep upgrading equipment, (2) to protect against obsolescence, and (3) to lower down payments.