International Travel and Leisure Company Performance: Key Yield Ratios

Abstract

Do global financial market conditions affect the financial structure and performance of companies in the travel and leisure sector? The economic conditions of tourist generating areas are assumed to play important roles in global travel, especially for emerging economies where international tourism plays a particularly important role as a source of foreign exchange. Yet, internationally, the literature so far lacks detailed understandings of the impact of how exogenous shocks in global financial markets affect the financial structure and performance of listed tourism and leisure companies (T & L). This paper explores 354 companies listed on stock exchanges in 12 countries from 1990 to 2007. Financial structure has significant impact on firm financial performance and adapt to altered economic conditions although sub industry and geographical differences also exist. Travel and leisure sector organisations should use strategic approaches to respond to exogenous change in the external, global environment. The paper sets a benchmark against which to measure the impact of the global financial crisis on the travel and leisure sector post-2008.

Keywords: macro trends, benchmarking, key yield ratios, company financial structure and performance, travel and leisure sector