COVID-19: hotel industry response to the pandemic evolution and to the public sector economic measures

ABSTRACT

The hotel industry is one of the most negatively impacted economic sectors by the COVID-19. Its recovery relies on the capacity to control the pandemic and to the macroeconomic efficiency of the policies undertaken by public institutions to enhance general economic recovery. In this context, it is essential for hotel industry stakeholders to assess the economic impact directly attributable to the COVID-19 pandemic’s evolution, along with the effect that economic policies may have in supporting the industry. Accordingly, this paper estimates how the 20 world-largest and publicly listed hotel companies’ stock market returns reacted to the pandemic evolution and to the different public sector economic measures across the different countries they operate using regression techniques. Specifically, the industry response is examined during the period ranging from February 24 to April 24, 2020. The main results show, on the one hand, that the hotel industry has been negatively affected by the COVID-19 evolution. On the other hand, hotel stock prices are positively correlated to economic policies with direct impact in public budget, whereas measures with non-direct impact, such as liquidity provisions or financial assistance, seem not to support the industry.

KEYWORDS:

• COVID-19
• diagnosed cases
• hotel industry
• stock returns
• economic policies
• public budget

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Additional information

Notes on contributors

Oriol Anguera-Torrell

Oriol Anguera-Torrell is the Director of the Hospitality Research Group at Barcelona School of Tourism, Hospitality and Gastronomy CETT (Universitat de Barcelona), where he also teaches Tourism Economics, Tourism Research Methods and Revenue Management. His main area of research is Applied Economics in the Tourism and the Hospitality industries. He received his PhD in Economics from Universitat Pompeu Fabra.

Juan Pedro Aznar-Alarcón

Juan Pedro Aznar-Alarcón is professor of Economics at ESADE Business and Law School, Ramon LLull University. He teaches Microeconomics, Game Theory and Industrial Organization in different undergraduate programs. His main area of research is the economic impact of tourism, specifically in the analysis of the hotels financial performance and the analysis of competition between hotels and touristic apartments using new platforms.

Jordi Vives-Perez

Jordi Vives-Perez is an assistant instructor of Economics at ESADE Business School and a Tourism Economics Lecturer at Barcelona School of Tourism, Hospitality and Gastronomy CETT (Universitat de Barcelona). Jordi holds a Bachelor of Business Administration from ESADE Business School and has some relevant experience in the Spanish government consulting sector. The main area of his research is Applied Economics in the Tourism and Hospitality industries.