Performance Of Tourism Firms Research Articles

The Synergistic Effects of Innovativeness, Risk-taking and Proactiveness on Performance of Tourism Firms

ABSTRACT This work aims to resolve the debate on the multidimensionality of entrepreneurial orientation, analyzing how the dimensions of this orientation – innovativeness, risk-taking and proactiveness - impact on firm performance. The study examines the direct, indirect and moderating effects of these three dimensions to explain the performance of tourism companies. The empirical study is conducted on a sample of 238 tourism firms located in three of Peru’s World Heritage Sites (Arequipa, Cusco and Lima), using partial least squares structural equation modeling. The results show that proactiveness has a positive, significant, direct effect on firm performance, while risk-taking only has an indirect effect on firm performance through proactiveness. Furthermore, innovativeness has a positive moderating effect on the relationship between proactiveness and firm performance. The findings suggest theoretical and practical implications for tourism firms.

Do small public grants boost tourism firms’ performance?

This study provides new evidence on the impact of tourism grants for service-standard improvement on tourism firm performance. Small matching grants provided to firms in two economically different regions are considered. We study additionality caused by the grants in the performance indicators of firms while taking into account regional heterogeneity and differing tourism demand. In the context of tourism firms in Croatia, we estimate the causal effect via a matching difference-in-differences estimator. We find a positive effect on tourism firm sales, value-added, capital, and labor in the region with higher tourism demand but not in the one with lower tourism demand. A cost–benefit analysis suggests that, in more developed regions, the benefits of the grant scheme for tourism outweigh the grant’s direct costs.

Understanding the effects of economic policy uncertainty on US tourism firms’ performance

This study analyzes the impact of economic policy uncertainty (EPU) on the performance of US tourism firms using a sample of 296 publicly traded tourism companies from 2000 to 2018 with a sample of 3068 firm-year observations. Estimation results of panel regressio tests based on the system-generalized method of moments indicate that EPU has a negative impact on return on assets (ROA), return on equity (ROE), and Tobin’s Q. Our results are consistent for different variable specifications. We also find that firm size and leverage play a moderating role in the relationship between EPU and firm performance. Panel quantile regression results show that the impact of EPU on US tourism firm performance is asymmetric. Specifically, low-performing (25% quantile of ROA and ROE) firms are less affected by EPU, and for the case of Tobin’s Q, EPU does not affect firms with a high growth opportunity (100% quantile of Tobin’s Q).

Tourism firm restructuring: Does the attention of individual investor matter?

Abstract We examine the power of individual investor attention in increasing tourism firms' restructured performance, the different effects caused by ‘attention heterogeneity’, the moderating effect of media coverage on the relationship between individual investor attention and tourism firms' restructured performance, and the robustness of the effects. The results indicate that 1) individual investor attention has a significant positive effect on tourism firms' restructured performance, 2) individual investor attention via mobile devices influences tourism firms' restructured performance more than attention via computers, 3) the moderating effect of media coverage on this relationship varies with time and media heterogeneity, and 4) the effect of individual investor attention is immediate, while time is needed for the moderating effect of media coverage to appear. The main effect of individual investor attention and the moderating effect of media coverage on tourism firm performance do not depend on the firm size or the proportion of individual shareholders.

Corporate social responsibility and organisational performance in the tourism sector

This study tests the bidirectional connections between corporate social responsibility performance and the financial performance of firms within the tourism sector and related industries based on the instrumental stakeholder and slack resources theories. Disaggregated measures of firms’ corporate social responsibility practices and corporate financial performance were considered to avoid compensation effects. This choice also allows for testing of whether separated dimensions of corporate social responsibility have different linkages with corporate financial performance measures. Static and dynamic panel data regression models were implemented for robustness. With a few exceptions, the study found a neutral impact of corporate environmental, social, and governance performance on firms’ financial success. This study therefore recommends that managers of tourism firms should engage in corporate social responsibility practices, which can contribute to different sustainable development goals without sacrificing financial performance. Contradictory to the slack resources theory, with a few exceptions, the higher the financial performance of tourism firms, the lower their commitment to corporate social responsibility issues. Furthermore, tourism firms must communicate their corporate social responsibility initiatives to develop public awareness of their environmental, social, and governance efforts.

Entrepreneurship in tourism firms: A mixed-methods analysis of performance driver configurations

Tourism firms’ financial performance is determined by a complex interplay of factors, both internal and external to the firm. Predominant internal factors are their entrepreneurial behavior and financial resources. External factors refer to the network of actors contributing to the tourism product as well as market and competitive uncertainties. Employing fuzzy-set qualitative comparative analysis (fsQCA) on quantitative data from a survey of 113 owner-managers of small and medium-sized tourism firms from Austria, this study investigates configurations of factors that lead to high firm performance. Results reveal six different configurations, which can be grouped into high or low environmental uncertainty settings and highlight the relevance of multidimensional Entrepreneurial Orientation (EO), financial endowment, and personal and professional networks. Using a sequential mixed-methods approach, 13 qualitative follow-up interviews with owner-managers from the sample help to gain deeper insights into the identified configurations and to formulate successful paths to higher tourism firm performance.

The influence of foreign institutional investors, institutional directors, and the share pledge ratio of directors on financial performance of tourism firms

Corporate governance is a critical component relevant to firm performance. In the tourism sector, corporate governance is an underexamined issue. The purpose of the current study is to bridge this gap by examining the influence of foreign institutional investors, institutional directors, and shares pledged by directors on tourism firms’ financial performance. Data are derived from listed tourism firms in Taiwan. Ordinary least square regressions and two-stage least square regressions are used to examine the hypotheses. Results show that the presence of foreign institutional investors and a low share pledge ratio of directors have significant effects on return on assets and Tobin’s Q. The presence of institutional directors has a positive effect on Tobin’s Q. Implications for owners, policy makers, and investors are discussed.

The moderating effect of board size on the relationship between diversification and tourism firm performance

This study examines the effects of diversification strategy and board size on firm performance as well as the moderating effect of board size on the relationship between diversification strategy and firm performance in the Chinese tourism industry from 2008 to 2015. The results show that related diversification positively influenced Chinese tourism firm performance, and unrelated diversification negatively influenced it. Board size was found to negatively moderate the relationship between related diversification and firm performance and to positively moderate the relationship between unrelated diversification and firm performance. In addition, the results imply that small boards are beneficial to Chinese tourism firms when both related and unrelated diversification strategies are implemented.

Philanthropic giving, sales growth, and tourism firm performance: An empirical test of a theoretical assumption

Aiming to test a theoretical assumption that corporate giving (CG) could increase sales of tourism firms and hence firm performance, this study empirically investigates whether CG could increase sales growth and enhance firm performance in the Chinese tourism industry. Empirical results can enhance theoretical innovation and development. Panel regression test results reveal three interesting findings and support the theoretical assumption. First, there is a variation in the impact of CG on tourism firm performance. While CG does not significantly affect Chinese travel firm performance, it has a significant effect on hotel firm performance in terms of sales growth, return on asset, and return on equity. Second, state ownership is not a critical factor in the financial impact of CG on travel and hotel firms. Third, the Chinese hotel industry might use CG a short-term image builder and sales and profitability generator rather than as a long-term competitiveness strategy. Lastly, there is an inverted U-shaped relationship between CG and hotel firm performance.

The effects of entrepreneurial orientation dimensions on performance in the tourism sector

PurposeThe purpose of this paper is to examine the influence of entrepreneurial orientation (EO) dimensions on firm performance in the tourism sector. The goal is twofold: on the one hand, the paper aims to test whether EO dimensions are still significant determinants of performance after controlling for possible confounding factors; on the other hand, it aims to address the question of which EO dimension exerts the strongest effect on performance.Design/methodology/approachA survey was carried out in the Sardinian accommodation sector in 2012 and 224 questionnaires were collected. The multidimensional EO constructs were adopted.FindingsThe results show that innovativeness, proactiveness and autonomy were significantly associated with tourism firm performance, whereas risk-taking and competitiveness were not.Research limitations/implicationsThe results are limited to the Sardinian accommodation context. Self-reported data were used to measure firm performance. Further research works could replicate the analyses using objective firm performance not only in similar touristic destinations but also in other countries and incorporating other industries.Practical implicationsThe study suggests educational and managerial implications. Entrepreneurs in the tourism sector should be encouraged to adopt an innovative, autonomous and proactive approach in managing their firms.Originality/valueThe study advances entrepreneurial knowledge in the tourism sector and in particular in the accommodation industry. The multidimensional EO approach has never been adopted among touristic firms. Furthermore, considering that EO research has been overlooked in the country of Italy, this study’s contribution is also providing evidence from an area that has received minimal attention to date.

Structure, conduct and performance paradigm in assessing travel agency performances

Abstract The purpose of this paper is to present and exemplify traditional and neoclassical approaches to market structure and tourism firm performance analysis. The paper tackles some of the industrial economic thinking trends which were meant to fill the gaps left by the traditional approaches. Two approaches stand out from among the industrial economic trends: SCP paradigm and game theory. The results show that the strategy tourism operators prefer is to practise high prices; however there is no certainty that the competitors would adhere to such an idea at the beginning or during the season.

The Impact of the Great Recession of 2009 to 12 on the US Tourism Industry and Firm Performance

This paper empirically examines the effect of the Great Recession of 2009 to 12 on the US tourism industry and firm performance. The daily equity index and firm performance data are collected from the 30 selected US tourism firms during the period of 2005 to 12. Applying the joint test of contagion, proposed by Fry-McKibbin, Hsiao and Martin (2017), to test for contagion in the US tourism firms, the results show that the Great Recession of 2009 to 12 has a direct and significant impact on the US tourism industry and tourism firm performance. Specifically, concurrently with the major events (e.g., the European debt crisis), that occurred during the crisis, more than 85% of the US tourism firms on average are affected by this crisis. At the firm performance, the results show that the crisis severity index negatively correlates with liquidity, profitability, growth, turnover ratios, but positively correlates with leverage ratios. Furthermore, the results indicate that the liquidity, profitability and growth ratios play a more important role than turnover and leverage ratios in explaining the crisis transmission during the Great Recession of 2009 to 12. The findings offer practical value to help tourism firms monitor and control their performance measures to prepare for future economic downturns.

Business models among SMTEs: identifying attitudes to environmental costs and their implications for sustainable tourism

ABSTRACTThis paper examines how environmental resources and costs feature in business models of small- and medium-sized tourism enterprises (SMTEs). Several studies have pointed to the generally positive nature of the relationship between the economic and environmental performance of tourism firms. Yet, although business models act as a vector between these aspects of firm performance, they have been overlooked in sustainable tourism discourse. The paper reports findings from discussion groups of SMTE businesses in South West England during the global economic downturn. Environmental costs and cost control were afforded relatively little importance in terms of value creation; conversely, there was a strong and predictable emphasis on revenue generation. Indirect tactics emerged for dealing with guests’ environmental behaviours which reflected this prevailing commercial logic. Green credentials were routinely de-emphasized, sometimes regarded as liabilities, in a form of greenhushing. Responses were framed by reference to social media and how online reviews may negatively impact on future value capture. Conceptually, the business model emerged as an important lens for understanding how environmental resources and costs were valourized. The paper highlights the need to ensure that contemporary approaches to environmental management in SMTEs reflect the current and fast-changing conditions that frame business models.

Global–local trajectories for regional competitiveness: Tourism innovation in the Western Cape

The paper interrogates regional competitiveness by analysing tourism innovation and networking as a case study example from the Western Cape region, South Africa. The economic significance of services and tourism to the region, as well as the innovation performance of tourism firms, and the policy environment which supports innovation and tourism are examined. An analysis of micro-data discloses that innovation is widespread and therefore is significant for the competitiveness of the regional tourism economy. The results of this investigation point to the critical need for regional policy to focus on strategic networking linkages to access global knowledge flows, as well as the need to develop tourism as core regional competency, and to strengthen the capacity of local institutions to foster regional innovation, competitiveness and growth in the Western Cape economy.

The influence of governance on tourism firm performance

Corporate governance is a critical mechanism for the success of any firm. In the tourism sector, however, the issue of governance has attracted little research attention. This study enriches the literature on tourism governance by investigating how board size, the proportion of large shareholders and gender diversity on boards affect the financial performance of tourism firms. The sample data were obtained from publicly traded tourism firms in Taiwan. Ordinary least square regressions and two-stage least square regressions were conducted to test the hypotheses. The results show that board size is negatively related to performance and that the presence of large shareholders has a significant influence on tourism firms' return on assets and Tobin's Q. The influence of gender diversity on firm performance, however, was inconsistent. These governance variables are also confirmed as endogenous variables in the tourism sector.

Board Governance and Tourism Firms' Performance: The Case of Taiwan

The purpose of this research is to examine the influence of board independence, CEO duality and managerial ownership on performance of tourism firms, measured by return on assets (ROA). The sample included seven publicly traded hotels in Taiwan. Ordinary least square (OLS) regression and two-stage least square (2SLS) regression were performed to test the hypotheses. The results demonstrate that performance of hotel firms had a significantly positive relationship with board independence and CEO duality. Board independence, CEO duality and managerial ownership were confirmed as endogenous variables. The results can help hotel firms realize the influence of board governance on performance and accordingly establish governance systems.

Strategic orientation and performance of tourism firms: Evidence from a developing country

This study investigates whether tourism firms in a developing country, namely Turkey, which adopt one of the four strategic orientations of Miles and Snow (1978), differ based on their financial and non-financial performance. The study results show that there is a difference in both financial and non-financial performance based on the strategic orientations followed by tourism enterprises. Generally, prospectors were found to outperform defenders, whereas analyzers showed a comparable performance to prospectors. The findings of this study imply that in developing countries, tourism businesses may be indifferent when choosing between these two strategies based on their internal characteristics since they yield similar financial results. Specific factors and developments in the macro environment and company-specific factors seem to affect tourism firms' strategic orientation as well as their performance. Better understanding and closer analysis of such factors can help improve the performance of tourism businesses in developing countries. Further research using both perceptual and objective measures is needed to confirm the present results to better assess possible differences in performance among strategic orientations in some other developing countries.

Interactions between business conditions and financial performance of tourism firms: Evidence from China and Taiwan

This study contributes to the fields of hospitality and tourism by examining interactions between business conditions and financial performance of tourism firms in both China and Taiwan. We investigate whether the improvement of business conditions enhances financial performance of tourism firms and whether financial success of tourism firms matters to business development. In general, cointegration test results support a long-run equilibrium relationship between the two variables, business conditions and financial performance of tourism firms, and Granger causality test results show that these two factors reinforce each other in both China and Taiwan. This study therefore documents significant contributions of financial success of tourism firms to business development and strengthening of financial performance of tourism firms by business conditions. Some managerial implications are also discussed.

Privatisation and the Development of Tourism in the Czech Republic and Slovakia: Property Rights, Firm Performance, and Recombinant Property

Privatisation is one of the key elements of the package of neoliberal reforms in the transition economies of Central and Eastern Europe which collectively constitute the ‘sharp shock’ strategy. In this, privatisation is ascribed the role of redistributing and clarifying property rights, which is an assumed precondition for efficiency improvements in individual firms. In practice, the transformation is characterised by path dependency, cultural and political legacies, and uneven and partial reform of market institutions and of regulation. We contribute to the debate on the link between property rights and firm-level performance in three main ways. First, we analyse the tourism sector as a counterbalance to the emphasis in the existing literature on manufacturing and financial services; particular emphasis is given to the roles of ‘operators’ and the ‘nomenklatura’, and to complex, nonlinear shifts in property rights. Second, we assess the performance of tourism firms created by different forms of creative and distributive privatisation; this emphasises the diversity of property rights, market segmentation, and the capital and debt structures of firms. Third, the value of the concept of ‘recombinant’ property for analysing the complex and changing forms of property rights is critiqued. These arguments are illustrated through a case study of tourism in the Czech Republic and Slovakia.

Environmental Auditing: A Tool for Assessing the Environmental Performance of Tourism Firms

It is acknowledged that tourists, as consumers of environment, can damage the very resources which form the basis of the tourism industry. What can be done to make current tourism activities environmentally more compatible? The initiative rests with the tourism firms themselves. Environmental auditing provides tourism firms with a tool to assess their environmental performance, identifying any negative environmental impacts and evaluating the opportunities to change current practices in order to improve that performance. The advantages and procedures of environmental auditing are summarized and examples given of the actual and potential application of the different types of environmental audit by tourism firms. Factors influencing the adoption of environmental auditing by tourism firms are discussed and the extent of current use by British tourism firms reviewed. In conclusion, it is argued that the adoption of environmental auditing will lead to improved environmental performance of tourism firms but not necessarily to environment-sustainable tourism.