Robert Nelson

Associate Professor

Department: Hotel, Restaurant & Institutional Management
Campus Address: 202 Raub Hall
Newark, DE 19716
Phone: 302-831-6455


Robert R. Nelson, associate professor and immediate past chair of the University of Delaware’s Department of Hotel, Restaurant & Institutional Management. Bob came to the University of Delaware as an assistant professor in 1990 and served as department chair from 2007 to 2011 and associate chair from 2000 to 2007. Prior to coming to the University of Delaware, Dr. Nelson was among the founding faculty of Drexel University’s hospitality program.

Dr. Nelson’s research on tourism development has led to numerous academic publications and paper presentations. He served as editor of the Journal of Convention & Event Tourism from 2007 to 2012. Dr. Nelson’s book projects include Current Issues in Convention and Exhibition Facility Development and Developing a Successful Infrastructure for Convention & Event Tourism. In the upcoming year he will spend his sabbatical from the University of Delaware as a visiting scholar at Cornell University’s Center for Real Estate and Finance where he will look to develop new models to assess public / private partnerships to encourage hotel real estate development.

Dr. Nelson is listed in Who's Who in America and Who's Who in the Lodging Industry. He serves and has served on the board of directors of several industry and philanthropic organizations. Among them are the Delaware Hotel & Lodging Association, the Delaware Restaurant Association, FTA, Blue Hen Hotel LLC and the Ronald McDonald House of Delaware. Dr. Nelson earned his Ph.D. from the University of Delaware's School of Urban Affairs and Public Policy where he focused on tourism and convention centers as catalysts for local economic development. He is a graduate of Cornell's School of Hotel Administration and has an MBA from Drexel University's LeBow College of Business.


Associate professor and former HRIM chair, Bob Nelson, was granted a sabbatical leave in 2013 during which he returned to his alma mater, Cornell, as a visiting scholar in the school’s Center for Real Estate and Finance. While there he assembled a team that included the Center’s director Jan deRoos, statistician Russell Lloyd and econometrics expert Andrey Ukhov to look at the widespread practice of public subsidies to encourage hotel development in the United States. The following is a summary of the ongoing research Nelson and his Cornell collaborators began during his sabbatical

In recent decades communities in the United States have increasingly turned to public private partnerships to encourage development of hotels. Under such arrangements communities provide incentives to encourage private sector investors to build hotels. Many times these subsidies are directed to convention hotels that can house delegates, exhibitors and other attendees participating in events at publicly owned conventions centers. These incentives can take many forms. Among them are:

-   Tax rebates and deferrals including payments in lieu of taxes (PILOTs)

-   Waiving development impact fees and/or building permits

-   Lowering development costs by subsidizing one or more aspects of the project, particularly related infrastructure needed to support the hotel such as roads, parking, and utility extensions.

-   Low cost leases or sales of public land

-   Assisting the project with public debt instruments which might include tax increment financing (TIFs)

-   Direct subsidies through development grants.


In some situations where the returns to investors are such that a desired hotel project cannot attract enough capital to be developed, it can make sense for the public sector to subsidize the project because the public sector can capture benefits that the private sector cannot. Among these are increased tax revenues, job creation, improved performance of a convention center, potential gentrification of a blighted area and an amenity that enhances the community.

Nelson’s exploratory work found that in spite of nationwide commitments totaling billions of dollars for such subsidies, and quite a bit of controversy surrounding them, there was very little in data on these expenditures. Consequently his work began with the long and laborious task of assembling the largest and most complete database on publicly subsidized hotels (PSH). Nelson identified 118 U.S. hotels representing 53,852 rooms that have received public sector aid that ranges from 5 to 100 percent of the project cost. The mean public subsidy is over 50% and 38 properties are fully funded by the public sector (see Table 1 and Figure 1). In addition, ongoing monitoring of news services identified another fifty-six communities that are considering or developing hotels that will use some type of public assistance over the next five years.


Table 1 – Data on Publicly Supported Hotels in the U.S.

Properties Identified as Receiving Subsidies =                 118

Number of Guest Rooms =                                          53,852

Public Investment =                                                     $8,253.6 million

Total Project Values =                                                $16,418.4 million

Mean subsidy =                                                                   50.2%

33 properties (28%) are financed in their entirety with public funds.



Figure 1 – A Breakdown of Public Funding for Hotels in the United States by Percentage of the Projects that were Supported by Public Dollars


During his time at Cornell Nelson and his collaborators developed and published a new model based on the income capitalization approach to valuation that quantifies the return on investment that communities get from their subsidies of PSHs. For this effort they were awarded the best paper award at the International Convention and Expo Summit which was held in Bangkok. The model takes a holistic approach that looks at the net present value of all the cash flows that accrue to the City and State from the hotel. These include:

  • Transient occupancy taxes generated by the project including any sales taxes that accrue to the sponsoring government as a result of rooms revenue.
  • Incremental payroll taxes from hotel operations
  • Incremental income taxes to the sponsoring government
  • Incremental property taxes
  • Incremental taxes on food, beverages and other income from the property.


Another part of their work looks at how the performance metrics of competing hotels are impacted when a PSH enters the market. There are two opposing sides that frequently square-off in the debate over the use of public money to encourage hotel development. One boldly proclaims that the hotel they are championing will be a “game changer” that will drive up rates, attract new demand, and raise the profits of existing properties in the market. The other side raises concerns about the fairness of publicly subsidized competition that could take market share from competing properties whose owners invested in the community in good faith. Surprisingly there is a lack of systematically collected data to support either of these positions. Nelson and his team are beginning to address this gap by examining how the performance metrics of competing hotels are impacted when a PSH enters the market. The group developed a graphic representation that maps the metrics of individual hotels in a marketplace along the dimensions of market strength and market volatility, before and after the opening of a PSH.


Their pilot study, which examined eight projects, is now being expanded to include to include all PSHs in the U.S. that are wholly publicly owned and have been open long enough to establish a track record. While their initial sample was not large enough to draw reliable conclusions from, it appears that the sought after “game changer” phenomena where the PSH improves the fortunes of competing hotels in the market can be illusive. A slightly more common trend, that is especially evident in seasonal markets, appears to be that a PSH can cause larger seasonal swings. In these markets the PSH attracts enough new business during peak seasons to have spillover effects that benefit surrounding hotels, but during low season the additional inventory tends to drive metrics of competing hotels to new lows. This trend was evident both Northern and sunbelt markets. It does not matter how nice your accommodations, few people long to be in Phoenix, Arizona in August or Lancaster, Pennsylvania in January.

Professor Nelson happily returned to the University of Delaware in the fall where he is continuing to build on the work he initiated during his time as a visiting scholar at Cornell. Nelson notes that, “I am grateful to the University of Delaware and Cornell’s Center for Real Estate and Finance for affording me this wonderful opportunity.”

The Lerner College is home to a state-of-the-art financial trading facility, the $1.5 million student-led Blue Hen Investment Club, a student-managed restaurant and hotel, a high-technology development center of a global bank and a start-up experience for students with new business ideas.

Undergraduate scholarships, made possible through the generosity of alumni and friends, enable us to support promising scholars. Here, Delaware Gov. Jack Markell and his mother, Leni Markell, join recipients of the William Markell Scholarship (center), which benefits students in Accounting and MIS.

The Institute for Financial Services Analytics is a collaboration between the Lerner College, UD's College of Engineering and JPMorgan Chase, and hosts events for academics and the business community designed to address consumer analytics and industry applications.

All Lerner College departments offer discovery learning experiences and emphasize data-based analytics to enrich the student experience. Here, students at Vita Nova, our award-winning restaurant run through HRIM, joined professional chefs and winemakers in hosting a 2014 Mid-Atlantic Wine and Food Festival event.

Lerner College faculty - like Meryl Gardner, whose research on foods and moods was recently published in the Journal of Consumer Psychology - are thought leaders who command attention from influential business audiences, economists and policy makers.

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