Statistical Methods in Finance 2023

December 19 to 23, 2023



Determinants of Profitability in Indian Hospitality Industry: A Panel data Investigation

By Isha Singla
SVKM's NMIMS University, India

The goal of this study is to identify the financial determinants of the Indian Hospitality Industry. For this purpose, we used data collected over a period of 13 years (2010-2022) of 26 firm’s operating in the hospitality sector of India. The data was arranged in a strongly balanced panel form and was analyzed using dynamic panel data estimation. The study finds that the profitability of hospitality sector in India has decreased significantly over a period of time. However, it saw a revival in year 2022, post Covid-19. Ownership structure, firm’s age, its fixed asset utilization ratio have proven to be important, positive indicators of the hospitality industry’s profitability in India. The profitability of hospitality sector is also driven by its own past, while liquidity is a negative driver of firm’s performance in hospitality sector. The study has inferences for stakeholders in hospitality sector and the outcomes of the study can be used by hotels as well as travel agencies to better their long term profitability.