Are ESG-committed hotels financially resilient to the COVID-19 pandemic? An autoregressive jump intensity trend model.

Given that the United Nations views environmental, social, and governance (ESG) as a practical framework for anchoring responsible corporate behavior to achieve its sustainable development goals, this study constructs an autoregressive jump intensity trend (ARJI-trend) model to determine if ESG can improve future resilience and create crisis-resilient value for chained-brand hotel corporations from the effects of COVID-19. The findings indicate that the ARJI-trend model indeed captures both the permanent and transitory components of the hotel corporation's ESG performance related to stock return dynamics. When ESG rating is taken into account, the following conclusions emerge: 1) the transitory component of time-varying return variance decreases but the permanent component does not; 2) the hotel corporation portfolios with a lower transitory component experiences a higher return, implying that the hotel corporations with a higher ESG rating appear to be more defensiveness; and 3) with proper asset reallocation, a portfolio centered on strong ESG-conscious hotel corporations is a safe-haven asset during market turmoil.

The economy, tourism growth and corporate performance in the Taiwanese hotel industry.

This study investigates the impact of economy and tourism growth on the corporate performance of tourist hotels in Taiwan. The indicators of corporate performance under consideration are occupancy rate (OPR), return on assets (ROA), return on equity (ROE), stock return, and the overall financial performance measured by a comprehensive score (a combined measure of asset management, profitability, short-term solvency or liquidity and long-term solvency based on factor analysis). The effects of changes in the state of economy (real GDP growth rate, Δ GDP ) and tourism growth (growth rate of total foreign tourist arrivals, Δ TA ) on the corporate performance of tourist hotels are then examined via panel regression tests. Test results show that both Δ GDP and Δ TA are significant explanatory factors of OPR, but only Δ TA can strongly explain ROA and ROE. However, neither Δ GDP nor Δ TA have a significant influence on hotel stock performance. Further, the economic factor ( Δ GDP ) is slightly more crucial than the industry factor ( Δ TA ) in describing the overall financial performance in the Taiwanese hotel industry. Empirical findings offer valuable information for government tourism policymakers and tourist hotel owners and managers.

Financial portfolio approach to optimal tourist market mixes.

This study applied a financial portfolio theory to estimate optimal market mixes to minimize the instability of inbound tourist market demand. An empirical analysis was applied to inbound tourists to Taiwan. The results shed light on diversification in tourism market and offer tourism authorities and policy-makers explicit guidelines for risk management in the destination planning process. Specifically, using optimal mixes with various return/risk options can facilitate a more stable pattern of arrivals from foreign countries. To achieve the Doubling Tourist Arrivals Plan, introduced by the Taiwanese government in 2002, the tourism authorities should take the high-return/high-risk option and shift available resources to Japan. More policy implications are provided to guide tourism authorities and policy makers.

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.

Tourism expansion and economic development: The case of Taiwan.

This study examines the causal relationship between tourism expansion and economic development in Taiwan. A Granger causality test is performed following the cointegration approach to reveal the direction of causality between economic growth and tourism expansion. Test results indicate a long-run equilibrium relationship and further a bi-directional causality between the two factors. In other words, in Taiwan, tourism and economic development reinforce each other. A discussion follows and managerial implications are identified based on the empirical findings.

The impact of macroeconomic and non-macroeconomic forces on hotel stock returns.

This study aimed to examine the relationship between macroeconomic and non-macroeconomic variables and hotel stock returns using hotel companies listed on the Taiwan Stock Exchange. The regression analysis indicated that among the macroeconomic variables (i.e., money supply, the growth rate of industrial production, expected inflation, the change of unemployment rate, and the yield spread), only money supply and the unemployment rate significantly explained the movement of hotel stock returns. On the other hand, all non-macroeconomic forces selected (i.e., presidential elections, the 921 earthquake, the 2003 Iraqi war, the outbreak of SARS, sports mega-events, the Asian financial crisis, and the 911 terrorist attacks) had significant influences on the hotel stock returns. The empirical results of this study may be used as valuable information for local and global stock investors who seek an investment opportunity in the hospitality industry.