From disruption to recovery: a multi-country analysis of tourism and hospitality firms' performance post-COVID-19

This study employs a discontinuous growth model, a method that captures shifts in trends over time, to explore how the performance of tourism and hospitality firms has evolved from the pre-COVID to the post-COVID period. It uncovers two key insights. Firstly, a substantial decrease in tourism and hospitality firms' financial and market performance was evident in 2020. For instance, their return on assets in 2020 was 348% lower than in 2019. Secondly, while there was no improvement in their financial performance in 2021, a noteworthy improvement in market performance was observed. In 2022, both financial and market performance exhibited significant recovery. Remarkably, the degree of recovery in market performance in 2021 and financial performance in 2022 mirrored their respective declines in 2020, indicating a restoration of tourism and hospitality firms' performance to the pre-crisis level. However, this restoration was not observable among firms with low liquidity, little retained earnings, and high financial constraints, suggesting that such firms may take actions (such as cost-cutting) that can lead to a decline in their quality of services and customer experiences. Therefore, this study underscores the importance of government support to some tourism and hospitality firms even in the aftermath of the COVID-19 crisis.