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Tourism firms survival jeopardized

Abstract
A substantial decrease in revenues will, without any government intervention, affect the survival of the tourism firms. However, the effects of decreased demand and liquidity differ among subsectors and should be investigated separately. This paper explores the survival rate of Slovenian firms, operating in tourism industry during the period 2008-2018. Results show that the 10-year survival rate is around 60 percent, but there are substantial differences between the subsectors. We show that both liquidity ratios and sales per employee significantly affect survival rates, the first one having stronger effect within travel agency, accommodation, transport and food & beverage subsectors, while the former within gambling. Based on hazard ratios we can conclude that the expected fall in sales and worsened liquidity ratios of firms, operating in tourism sectors, will result in fallen survival rates. Crisis control measures will have to be adjusted for sub-sector in order to limit the firms’ default.
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