The impact of COVID-19 outbreak on hotels’ value compared to previous diseases: the role of ALFO strategy

  1. García-Gómez, Conrado Diego 1
  2. Demir, Ender 2
  3. Díez-Esteban, José María 3
  4. Bilan, Yuriy 4
  1. 1 Universidad de Valladolid
    info

    Universidad de Valladolid

    Valladolid, España

    ROR https://ror.org/01fvbaw18

  2. 2 Reykjavík University
    info

    Reykjavík University

    Reikiavik, Islandia

    ROR https://ror.org/05d2kyx68

  3. 3 Universidad de Burgos
    info

    Universidad de Burgos

    Burgos, España

    ROR https://ror.org/049da5t36

  4. 4 Tomas Bata University in Zlín
    info

    Tomas Bata University in Zlín

    Zlín, República Checa

    ROR https://ror.org/04nayfw11

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Journal:
Heliyon

ISSN: 2405-8440

Year of publication: 2021

Volume: 7

Issue: 8

Pages: e07836

Type: Article

DOI: 10.1016/J.HELIYON.2021.E07836 GOOGLE SCHOLAR lock_openOpen access editor

More publications in: Heliyon

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Abstract

By using the Event Study Method (ESM), this paper aims to examine the effect of new coronavirus (SARS-CoV-2) disease (COVID-19) outbreak on the market performance of the hotel industry in the U.S. We also compare the impact of COVID-19 outbreak with three previous diseases outbreaks. The results show that there is a negative influence of the diseases outbreaks on stock returns of hotels in the U.S. However, the impact of COVID-19 is incomparably higher in magnitude compared to previous diseases. Furthermore, given the importance of following flexible corporate strategies to adapt to new and unpredicted situations, it is found that the ALFO (assets-light, fee-orientated) strategy acts as a mitigator for the predicted market value drop due to the pandemic.