COVID-19: hotel industry response to the pandemic evolution and to the public sector economic measures

The hotel industry is one of the most negatively impacted economic sectors by the COVID-19. Its recovery relies on the capacity to control the pandemic and to the macroeconomic efficiency of the policies undertaken by public institutions to enhance general economic recovery. In this context, it is essential for hotel industry stakeholders to assess the economic impact directly attributable to the COVID-19 pandemic’s evolution, along with the effect that economic policies may have in supporting the industry. Accordingly, this paper estimates how the 20 world-largest and publicly listed hotel companies’ stock market returns reacted to the pandemic evolution and to the different public sector economic measures across the different countries they operate using regression techniques. Specifically, the industry response is examined during the period ranging from February 24 to April 24, 2020. The main results show, on the one hand, that the hotel industry has been negatively affected by the COVID-19 evolution. On the other hand, hotel stock prices are positively correlated to economic policies with direct impact in public budget, whereas measures with non-direct impact, such as liquidity provisions or financial assistance, seem not to support the industry.