Unraveling the Financial Impact of COVID-19 on the Tourism Industry through a Difference-In-Difference Analysis





The COVID-19 pandemic has had a significant and enduring effect on the tourism industry, specifically impacting travel agencies. To respond effectively, it is essential to comprehend the financial repercussions and challenges that these agencies confront. This study seeks to address existing gaps in knowledge by conducting a comprehensive examination of the tourism industry's financial performance in the post-COVID-19 era. Our methodology utilizes a Difference-In-Difference (D-I-D) approach, considering multiple investigations to establish a causal connection between the pandemic and the financial stability of tourism service providers. We analyse changes in the overall financial health of the tourism industry relative to other sectors both before and after the COVID-19 outbreak using Altman Z scores. Furthermore, we assess accounting harmonization across diverse jurisdictions and financial frameworks (IFRS, US GAAP, Czech GAAP, German HGB). Data is sourced from 11 multinational corporations in the tourism sector, supplemented with financial data from sectors such as Automotive, Manufacturing, Food and beverage, and Real Estate. Our empirical findings indicate that non-tourism entities experienced a 19% lower likelihood of bankruptcy post-COVID-19. This finding underscores the uniqueness of the tourism industry's challenges during the pandemic. In addition to these findings, we provide practical recommendations designed to assist companies in the tourism industry as they navigate the recovery phase following the pandemic. These insights are pivotal in enabling the industry to build resilient strategies and ensure its sustainability in a post-pandemic landscape.


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Author Biographies

Jiří Strouhal, Škoda Auto University, Mladá Boleslav, Czech Republic

prof. Ing. Jiří Strouhal, Ph.D.

ORCID ID: https://orcid.org/0000-0001-9109-7087

Škoda Auto University, Department of Finance and Accounting, Na Karmili 1457, 293 01 Mladá Boleslav, Czech Republic. www.savs.cz

Email: jiri.strouhal@savs.cz

Jiří is a Full Professor at Škoda Auto University and a Program Director of Business Economics and Business Informatics study program. He is President Emeritus of the Association of Czech Professional Accountants and the author of the current Czech accounting certification scheme of the Union of Accountants. He serves as an editorial board member for several high-ranked journals. His research interest covers accounting harmonization and its impact on financial performance and reporting and valuation of financial instruments. With 2,000,000+ miles flown and more than 130 countries visited, he could be recognized as a real field researcher in the area of tourism.

Sandeep Kumar Dey, Tomas Bata University, Zlín, Czech Republic

Sandeep Kumar Dey, Ph.D.

ORCID ID: https://orcid.org/0000-0002-9103-5422

Tomas Bata University in Zlín, Department of Business Economics, Faculty of Management and Economics, Mostní 5139, 760 01 Zlín, Czech Republic, www.fame.utb.cz

Email: dey@utb.cz

Sandeep is a seasoned academician whose career in tourism academia and industry spans for nearly 10 years. Currently, he serves as a post-doctoral researcher at TBU in Zlín. He has authored several upper-quantile research papers listed with Web of Science or Scopus databases in the field of sustainable tourism, the sharing economy, and machine learning techniques in econometrics. He also serves as a member of the Czech Mathematical Union and a reviewer for the Journal of Quality Assurance in Hospitality and Tourism and the Journal of Competitiveness.

Jitka Kloudova, Pan-European University, Czech Republic

doc. Ing. Jitka Kloudová, Ph.D

ORCID ID: https://orcid.org/0000-0002-8582-2323

Faculty of Entrepreneurship and Law, Pan-European University, Spálená 76/14, 110 00 Prague, Czech Republic

Email: jitka.kloudova@peuni.cz

Assoc. prof. Jitka Kloudova, PhD. studied Statistics for Economics at the University of Economics in Prague, Czech Republic. In 2003, she won a grant financed by the NATO Science Fellowships Programme. This enabled her to spend 3 months at Oxford Brookes University and 3 months at the Graduate School of Business, Manchester Metropolitan University. Her scientific research activities are oriented on the problems and issues associated with the field of global economic changes in relation to the relocation of industrial sectors and their effects upon entrepreneurial environments, especially on the problems with the development of the Creative Economy and its influence on economic growth and the role of creativity and creative economy in the regional development. She is the author of many publications (total number of publications: 94):  books and textbooks: 17, Scientific Journals: 35, Scientific conferences: 42.

Sinh Duc Hoang, International University-VNU-HCMC, Vietnam

Sinh Duc Hoang, Ph.D.

ORCID ID: https://orcid.org/0000-0001-6382-4056

Faculty of Economics – Finance        
Ho Chi Minh City University of Foreign Languages – Information Technology, Vietnam         
www. huflit.edu.vn     
Email: sinhhd@huflit.edu.vn 

Sinh is a lecturer at the HCMC UoFL-IT,, where he currently teaches business. In the past, Sinh has researched sustainable tourism, virtual reality, and fintech. He completed his master’s degree from the University of Montana in Missoula (USA). His research work has been indexed in esteemed journals indexed with leading scientific directories like Web of Science and Scopus.

Zuzana Tučková, Tomas Bata University, Zlín, Czech Republic

prof. Ing. Zuzana Tučková, Ph.D.

ORCID ID: https://orcid.org/0000-0001-7443-7078

Tomas Bata University in Zlín, Department of Business Economics, Faculty of Management and Economics, Mostní 5139, 760 01 Zlín, Czech Republic, www.fame.utb.cz

Email: tuckova@utb.cz          

She is a Full professor at the Faculty of Management and Economics and Dean of the Faculty of Logistics and Crisis Management at the Tomas Bata University in Zlin. She has over 17 years of experience in teaching, research, and consultancy. She has co-authored several scientific articles in the field of tourism and hospitality sciences, which have been published in journals with high impact factors and are graded A* and A by the ABDC. She serves as an editor for certain prestigious journals as well. Her research area spans a range of themes ranging from green human resources to crisis management.




How to Cite

Strouhal, J., Dey, S. K., Kloudova, J., Hoang, S. D., & Tučková, Z. (2024). Unraveling the Financial Impact of COVID-19 on the Tourism Industry through a Difference-In-Difference Analysis. Journal of Tourism and Services, 15(28), 143–160. https://doi.org/10.29036/jots.v15i28.614