Abstract
Measuring performance in tourism and hospitality services in general raises issues given the very idiosyncratic nature of tourism. The measurement of performance in tourism and hospitality services, as reflected in the literature, was done from various perspectives: from the perspective of efficiency, from the perspective of labor productivity, from the perspective of measurements in use (industry-specific indices), from the perspective of competitiveness and from the perspective of performance measurement. In this paper, we proposed a composite index to measure the financial performance of the tourism and hospitality services companies that combines the most common financial indicators: ROE, ROA, solvency and ROS. The tourism and hospitality companies covered in this study were selected from a larger database provided by IMIS containing the top 1.000 companies located in 5 Central and Eastern European countries: Croatia, Hungary, Romania, Serbia and Slovenia. These companies were analyzed and clustered based on different criteria: annual turnover, type of activity, location, number of employees, assets, net profit, return on equity, return on investment, solvency, debt analysis, so on. The IMIS database provided complete information regarding all accounting or financial variables over the 5-year period from 2014 to 2018. From the perspective of the composite index, a number of up to 15 companies from each country out of the 5 taken into account (Croatia, Hungary, Romania, Serbia and Slovenia) are analyzed. The selection criterion of the companies was the size of the annual turnover and number of employees. The analysis shows both the differences in financial performance and the specifics of the differences, reflected in the values of the financial indicators, specific for each country. Also, the PERF indicator managed to highlight the decline of financial results in tourism in 2016 which was signaled by the World Travel and Tourism Council caused by the fact that the sector was hurt by economic weakness, Brexit uncertainties and a ramp-up in terrorist attacks.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Altman EI (1968) Financial ratios, discriminant analysis and the prediction of corporate bankruptcy. J Financ 23(4):589–609
Altman EI (1993) Corporate financial distress and bankruptcy. Wiley, New York
Beaver WH (1966) Financial ratios as predictors of failure. J Account Res 4:71–111
Bedenik NO et al (2012) Early warning system—empirical evidence. TRŽIŠTE 24(2):201–218
Charitou A et al (2004) Predicting corporate failure: empirical evidence for the UK. Eur Account Rev 13(3):465–497
Chen MH (2010) The economy, tourism growth and corporate performance in the Taiwanese hotel industry. Tour Manage 31(5):665–675
Chi CG, Gursoy D (2009) Employee satisfaction, customer satisfaction, and financial performance: an empirical examination. Int J Hosp Manag 28(2):245–253
Chien-Min C et al (2011) The destination competitiveness of Kinmen’s tourism industry: exploring the interrelationships between tourist perceptions, service performance, customer satisfaction and sustainable tourism. J Sustain Tour 19(2):247–264. https://doi.org/10.1080/09669582.2010.517315
Deakin EB (1972) A discriminating analysis of predictors of business failure. J Account Res 10(1):167–179
Denizci B, Li X (2009) Linking marketing efforts to financial outcome: an exploratory study in tourism and hospitality contexts. J Hospitality Tourism Res 33(2):211–226
Droj L (2012) Financial Performance Analysis based on the Financial Statements for the Companies Located in the Bihor - Hajdu Bihar Euroregion, Annals of the University of Oradea, Economic Science Oradea, Romania. Series 21(2):464–470
Droj L (2015) Study Regarding the Profitability Indicators for the Romanian Companies Operating in the Tourism and Leisure Services Sector in the Period of 2010–2013. Annals of Faculty of Economics, University of Oradea, Faculty of Economics 24:817–824
Droj L, Tara IG (2018) Early warning indicators—evolution for the medical companies registered at BSE. Ann Faculty of Economics, University of Oradea, Faculty of Economics, vol. 1(2):102–108
Fenyves, V., Bács, Z.,Zéman, Z., Böcskei, E., &Tarnóczi, T., 2018. The role of the notes to the financial statements in corporate decision-making. Corporate Ownership & Control, 15. 138–148. https://doi.org/10.22495/cocv15i4c1p1
Goodall B (1995) Environmental auditing: a tool for assessing the environmental performance of tourism firms. Geogr J 29–37
Gursoy D, Swanger N (2007) Performance-enhancing internal strategic factors and competencies: Impacts on financial success. Int J Hosp Manag 26(1):213–227. https://doi.org/10.1016/j.ijhm.2006.01.004
Hall DR (1998) Tourism development and sustainability issues in Central and South-Eastern Europe. Tour Manage 19(5):423–431
Ham S, Lee S (2011) US restaurant companies’ green marketing via company websites: impact on financial performance. Tour Econ 17(5):1055–1069
Hsieh LF, Lin LH (2010) A performance evaluation model for international tourist hotels in Taiwan—an application of the relational network DEA. Int J Hosp Manag 29(1):14–24
Hughes H, Allen D (2005) Cultural tourism in Central and Eastern Europe: the views of ‘induced image formation agents.’ Tour Manage 26(2):173–183
Inoue Y, Lee S (2011) Effects of different dimensions of corporate social responsibility on corporate financial performance in tourism-related industries. Tour Manage 32(4):790–804
Jayawardena C, Ramajeesingh D (2003) Performance of tourism analysis: a Caribbean perspective. Int J Contemp Hosp Manag 15(3):176–179. https://doi.org/10.1108/09596110310470239
Jolliffe IT, Cadima J (2016) Principal component analysis: a review and recent developments. Philos Trans Seri A, Math, Phys, Eng Sci 374(2065):20150202. https://doi.org/10.1098/rsta.2015.0202)
Karanovic G, Karanovic B (2016) IPOs performance analysis: evidence from emerging markets in the Balkans. Scientific Ann Econ Bus 63(3):381–389. https://doi.org/10.1515/saeb-2016-0129
Lee C et al (2016) Innovation, entrepreneurship, and restaurant performance: a higher-order structural model. Tour Manag 53:215e228
Miller M (2013) Mathematics and statistics for financial risk management, Wiley
Molina-Azorin JF et al (2010) The importance of the firm and destination effects to explain firm performance. Tour Manage 31(1):22–28. https://doi.org/10.1016/j.tourman.2009.02.009
Morgan N, Anderson E, Mittal V (2005) Understanding firms’ customer satisfaction information usage. J Mark 69 (July), 131–151
Ohlson JA (1980) Financial ratios and the probabilistic prediction of bankruptcy. J Account Res 18(1):109–131
Saeidi SP et al (2015) How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. J Bus Res 68(2):341–350
Sainaghi R et al (2017) Performance measurement in tourism firms: a content analytical meta-approach. Tour Manage 59:36–56
Singal M (2014) The link between firm financial performance and investment in sustainability initiatives. Cornell Hospitality Quarterly 55(1):19–30
Sun KA, Kim DY (2013) Does customer satisfaction increase firm performance? An application of American Customer Satisfaction Index (ACSI). Int J Hosp Manag 35:68–77
Taiwan—An application of the relational network DEA. Int J Hospitality Manag 29(1):14–24
Tan S-H et al (2017) The impact of the dimensions of environmental performance on firm performance in travel and tourism industry. J Environ Manage 203:603–611. https://doi.org/10.1016/j.jenvman.2017.02.029
Tarnoczi T, Fenyves V (2011) Liquidity management and corporate risk. Ann Fac Econ 1:530–536
Author information
Authors and Affiliations
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2021 The Author(s), under exclusive license to Springer Nature Switzerland AG
About this chapter
Cite this chapter
Droj, L., Ban, O.I., Droj, G. (2021). Comparative Analysis of the Financial Performance of Tourism Companies Located in Central and Eastern Europe. In: Karanovic, G., Polychronidou, P., Karasavvoglou, A. (eds) The Changing Financial Landscape. Contributions to Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-82778-6_5
Download citation
DOI: https://doi.org/10.1007/978-3-030-82778-6_5
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-82777-9
Online ISBN: 978-3-030-82778-6
eBook Packages: Economics and FinanceEconomics and Finance (R0)