The Impact of the Financial and the Health Crisis on Listed Hotel Stocks

Abstract Travel and tourism represent one of the largest industries in the world as far as percentages of GDP and occupation are concerned, consequently, asset managers could be interested to select listed hotel stocks in their portfolios. The hotel industry has shown some difficulties not only in periods of financial, but also during the health crisis (Covid-19), when global and local restrictions on travel and tourism had a negative effect on the hotel sector. This study aims to analyze how listed hotel stocks could improve their contribution to portfolio diversification in different stages of the market. First, we use a constraint mean-variance approach to analyze the effect of diversification, and then we study the difference in the performance of the hotel sector by using the Risk-Adjusted Performance (RAP) measure. We analyze three sample periods: a) the whole sample (01/2000-09/2021); b) the Financial Crisis sample (06/2007-06/2012) and c) the COVID sample (02/2021-09/2021). Our findings contribute to a good understanding of financial patterns in the hotel industry as an asset class at different stages and support our hypothesis of its possible positive contribution in terms of diversification and performance. JEL classification numbers: G11, G12, G15 Keywords: Portfolio Management, Hotel Stocks, Financial Crisis, Health Crisis, Tourism.