COVID-19, government measures and hospitality industry performance

The economic impact of international travel measures used during the COVID-19 pandemic: a scoping review

INTRODUCTION

Assessment of the use of travel measures during COVID-19 has focused on their effectiveness in achieving public health objectives. However, the prolonged use of highly varied and frequently changing measures by governments, and their unintended consequences caused, has been controversial. This has led to a call for coordinated decision-making focused on risk-based approaches, which requires better understanding of the broader impacts of international travel measures (ITMs) on individuals and societies.

METHODS

Our scoping review investigates the literature on the economic impact of COVID-19 ITMs. We searched health, social science and COVID-19-specific databases for empirical studies preprinted or published between 1 January 2020 and 31 October 2023. Evidence was charted using a narrative approach and included jurisdiction of study, ITMs studied, study design, outcome categories, and main findings.

RESULTS

Twenty-six studies met the inclusion criteria and were included for data extraction. Twelve of them focused on the international travel restrictions implemented in early 2020. Limited attention was given to measures such as entry/exit screening and vaccination requirements. Eight studies focused on high-income countries, 6 on low-income and middle-income countries and 10 studies were comparative although did not select countries by income. Economic outcomes assessed included financial markets (n=13), economic growth (n=4), economic activities (n=1), performance of industries central to international travel (n=9), household-level economic status (n=3) and consumer behaviour (n=1). Empirical methods employed included linear regression (n=17), mathematical modelling (n=3) and mixed strategies (n=6).

CONCLUSION

Existing studies have begun to provide evidence of the wide-ranging economic impacts resulting from ITMs. However, the small body of research combined with difficulties in isolating the effects of such measures and limitations in available data mean that it is challenging to draw general and robust conclusions. Future research using rigorous empirical methods and high-quality data is needed on this topic.

Stock return anomalies identification during the Covid-19 with the application of a grouped multiple comparison procedure

This study investigates the impact of COVID-19 pandemic on the Chinese stock market in 2020. Using daily data of three industries, this study addresses the identification of abnormal stock returns as a multiple hypothesis testing problem and proposes to apply a grouped comparison procedure for better detection. By comparing the numbers of daily signals and numbers of stocks with abnormal positive and negative returns, the empirical result shows that the three industries perform differently under the pandemic. Compared to the non-grouped testing procedure, the signals found by the grouped procedure are more prominent, which is advantageous for some situations when there tends to be abnormal performance clustering at the occurrence of major event. This paper on stock return anomalies gives a new perspective on the impact of major events to the stock market, like the global outbreak disease.

The impact of the Covid-19 pandemic on the hotel Industry's economic performance: Evidence from Portugal

This paper estimates the impact of the Covid-19 pandemic on the economic and financial performance of the Portuguese mainland hotel industry. For that purpose, we implement a novel empirical approach to gauge the impact of the pandemic during the 2020-2021 period in terms of the industry's aggregated operating revenues, net total assets, net total debt, generated cash flow, and financial slack. To that end, we derive and estimate a sustainable growth model to project the 2020 and 2021 'Covid-free' aggregated financial statements of a representative Portuguese mainland hotel industry sample. The impact of the Covid pandemic is measured by the difference between the 'Covid-free' financial statements and the historical data drawn from the Orbis and Sabi databases. An MC simulation with bootstrapping indicates that the deviations of the deterministic from the stochastic estimates for major indicators vary between 0.5 and 5.5%. The deterministic operating cash flow estimate lies within plus or minus two standard deviations from the mean interval of the operating cash flow distribution. Based on this distribution, we estimate the downside risk, measured by cash flow at risk, at 1294 million euros. Overall findings shed some light on the economic and financial repercussions of extreme events such as the Covid-19 pandemic, providing us with a better understanding of how to design public policies and business strategies to recover from such an impact.

The interplay of personality traits and motivation in leisure travel decision-making during the pandemic

COVID-19 has negatively affected the travel and tourism industry and may continue to do so in the future. Therefore, hospitality businesses need to pay attention to consumer reactions, concerns, and motives for travelling in this era. This study leverages the stimulus-organism-behaviour-consequence (SOBC) model to examine psychological factors that influence Japanese travellers' intention to travel and willingness to pay premiums for safe travel by analysing data from 790 respondents. The findings of the study reveal that extraversion positively associates with introjected motivation and negatively with amotivation. Neuroticism personality type positively associates with amotivation and negatively associates with introjected motivation. Introjected motivation positively associates with perception of safe travel during COVID-19, whereas amotivation has a non-significant association with perception of safe travel during COVID-19. Perception of safe travel positively associates with intention to travel and willingness to pay premiums for safe travel. Finally, intention to travel has no effect on willingness to pay premiums for safe travel. These findings provide valuable theoretical and managerial implications.

Self-restraint, subsidy, and stock market reactions to the coronavirus outbreak: Evidence from the Japanese restaurant industry

This study examined the stock market response of the Japanese restaurant industry to the announcement of the self-restraint request and subsidy for restaurants by the Japanese government during the coronavirus outbreak. Using the event study approach, it was found that the market reacted negatively to the self-restraint request and positively to the subsidy for restaurants. Following the announcement of the self-restraint request, investors in the restaurant industry responded positively to the government's stringent policy responses. Conversely, following the announcement on the "dining-out" subsidy, investors reacted negatively to the stringent government policies. Our findings provide useful information for policy makers and practitioners to mitigate losses in the hospitality industry during the pandemic.

Did COVID-19 tourism sector supports alleviate investor fear?

The COVID-19 pandemic presented a dynamic black-swan event to which governments implemented support programmes to reduce sectoral probability of default. This research analyses investor response to such assistance, designed to mitigate the effects of the pandemic upon international aviation and tourism. Investor confidence in such support schemes is estimated through short-term abnormal returns. Results indicate significant differential behaviour, with fiscal policy found to be a dominant and largely effective mechanism generating median abnormal returns of 2.17 %. Specific assistance programmes relating to COVID-19 loan facilities, and the provision of pandemic relief packages significantly alleviated short-term investor concerns with median abnormal returns estimated between 2.87 % and 3.89 % respectively. Our empirical results offer investors and policymakers an additional layer of information.

The Impact of Hospitality Work Environment on Employees' Turnover Intentions During COVID-19 Pandemic: The Mediating Role of Work-Family Conflict

Employees' turnover intentions and work-family conflict as a result of the hospitality work environment are considered the major global challenges confronted by hospitality organizations, especially in the era of COVID-19. This study aims at identifying the impact of the hospitality work environment on work-family conflict (WFC), as well as turnover intentions and examining the potential mediating role of WFC in the relationship between work environment and turnover intentions, during the COVID-19 pandemic in a sample of three- and four-star resorts in Egypt. A total of 413 resorts employees from Egyptian destinations (Sharm El-Sheikh and Hurghada) participated in the study. The findings of the Structural Equation Modeling (SEM) revealed that the hospitality work environment significantly and positively affects employees' turnover intentions and WFC. In the context of the mediating role of WFC, results illustrated that WFC significantly partially mediates the relationship between the hospitality work environment and turnover intentions. Upon these findings, the study suggests that to prevent WFC and eliminate turnover intentions among resorts' employees, an urgent need to create a better work environment is vitally important. limitations and future research directions have been discussed.

Travel-Business Stagnation and SME Business Turbulence in the Tourism Sector in the Era of the COVID-19 Pandemic

The COVID-19 pandemic, apart from having an impact on public health, has also caused the stagnation of travel-bureau businesses and the management of small and medium enterprises (SMEs) in the tourism sector. This study aims to analyze the COVID-19 pandemic as a determinant of travel-business stagnation and turbulence in small and medium enterprises (SMEs), the influence of human resources, business development, and product marketing on the productivity of the travel and SME business, the direct and indirect effects of business innovation, economic digitization, and the use of technology on business stability and economic-business sustainability. This study uses an explanatory sequential qualitative–quantitative approach. Data were obtained through observation, in-depth interviews, surveys, and documentation. This study is focused on assessing the efforts made by travel-agency-business actors and SMEs in responding and adapting to changes in the business environment, both internally and externally. Human resources, business development, and product marketing together affect the productivity of travel agents and SMEs with a coefficient of determination of 95.84%. Furthermore, business innovation, economic digitization, and the use of technology simultaneously affect business stability with a coefficient of determination of 63.8%, and business stability affects the sustainability of travel and SMEs with a coefficient of determination of 67.6%. This study recommends a strategy for travel-agency-business sustainability and the stability of SMEs’ economic-business management towards increasing economic growth in the North Toraja Regency, South Sulawesi, Indonesia.

Can R&D investment reduce the impact of COVID-19 on firm performance?-Evidence from India

This study examines whether investing in R&D reduces the impact of exogenous shocks like the COVID-19 on stock market performance and accounting performance of manufacturing firms in India. For the sample of listed manufacturing firms, the paper finds that the firms engaged in R&D activities had lower negative cumulative abnormal return than those firms that did not invest in R&D in the pre-pandemic period using multiple event windows. The result suggests that R&D investments can lower value erosion for the shareholders during a severe crisis period. Further, using a difference-in-difference fixed effects model, the study finds that manufacturing firms engaged in R&D activities in the pre-pandemic period exhibited higher return on sales and growth of total income during the pandemic quarter vis-à-vis the non-R&D firms. The favorable accounting performance indicates the possibility of firm-level R&D being associated with the firm's ability to adjust its functioning during a crisis, thereby reducing the effect of the crisis. Finally, the study documents that government intervention to reduce the spread of the virus had a differential impact on firms based on their industry of operation. The findings have implications for investors, corporate managers, and policymakers in India.