How to survive a pandemic: The corporate resiliency of travel and leisure companies to the COVID-19 outbreak

What protects travel and leisure companies from a global pandemic, such as COVID-19? To answer this question, we investigate data on over 1200 travel and leisure companies in 52 countries. We consider 80 characteristics, such as company financial ratios, macroeconomic variables, and government policy responses. Using regressions and machine learning tools, we demonstrate that firms with low valuations, limited leverage, and high investments have been more immune to the pandemic-induced crash. We also find a beneficial effect of stringent containment and closure policies. Finally, our results indicate that countries with less individualism may be better positioned to cope with the pandemic. Our findings have implications for regulatory bodies, managers, and investors concerning future pandemic outbreaks.     

COVID-19 impact on firm investment—Evidence from Chinese publicly listed firms

The COVID-19 outbreak had a significant impact on business cash flows and investment activities. This paper examined the COVID-19 impact on Chinese business investment in 3326 A-share listed quarterly financial reports, from which it was found that the negative relationship was more pronounced in the large, eastern Chinese state-owned firms. Using a propensity score matching method and difference-in-differences estimation, corporate financial flexibility was also examined, with the results indicating that high cash flexibility provided a buffer that allowed firms to better deal with adverse external shocks as the firms that had high cash flexibility were able to significantly increase their investments after the COVID-19 outbreak. Various robustness tests were conducted, all of which verified the robustness of the results. Overall, the empirical results provided evidence that the COVID-19 pandemic in China had a negative impact on Chinese listed firms, and verified the vital role of flexible financial reserves for firm survival and development during crises.     

Feelings of uncertainty and powerlessness from Covid-19: Implications for advertising appeals in the restaurant industry

Are rational (emotional) advertising appeals more congruent with healthy (indulgent) products? Prior research shows inconsistent results on the congruency effect between appeal type and product category. This study sheds light on this topic by examining the moderating effect of two psychological states (i.e., feelings of uncertainty and powerlessness) caused by Covid-19 on the relative effectiveness of rational vs. emotional appeals in the context of food advertisements. The results suggest that people with low levels of uncertainty respond more favorably to rational (vs. emotional) appeals of a healthy food item, and this effect is attenuated among people with high levels of uncertainty. On the other hand, powerful people find emotional (vs. rational) appeals of an indulgent food item more attractive, and this effect is attenuated among powerless people. Theoretical and managerial implications are discussed.     

“Unprecedented,” “extraordinary,” and “we're all in this together”: Does advertising really need to be so tedious in challenging times?

As government-mandated lockdowns and steep declines in trade set in because of the COVID-19 pandemic, a common theme became apparent in the advertising of the time: It was all the same. Regardless of the product category or brand personality, many ads were remarkably similar. They began with melancholy music, voiceovers reminding the audience that the brand is here for them, and referred to these times as “unprecedented” and “extraordinary.” Ads reassured viewers that “together, we can get through this.” In this installment of Marketing & Technology, we articulate the problem of advertising sameness and explore how and why it likely arises during a time of crisis. We then discuss why advertising uniformity is a problem and present a series of strategic, media, and creative considerations—taking into account the constraints of a crisis— to help marketing professionals produce more effective advertising in the context of a disaster.     

Will we have the same employees in hospitality after all? The impact of COVID-19 on employees’ work attitudes and turnover intentions

A crisis caused by COVID-19 pandemic affected the whole world leaving long-lasting effects on almost every aspect of human lives. The aim of this study was to test how different effects of COVID-19, expressed through job insecurity, employees' health complaints occurred during isolation, risk-taking behavior at workplace and changes in the organization, may impact work-related attitudes (job motivation and job satisfaction) and turnover intentions of the employees in hospitality industry. Based on the data collected from 624 hospitality workers from Serbia, the results indicated that job insecurity and changes in the organization were predictors of all outcomes, in a negative direction, while risk-taking behavior acted as a predictor of job satisfaction only, also in a negative direction. The significance of demographic characteristics, as control variables, showed that age and marital status had significant impact on job motivation and turnover intentions. The theoretical and practical implications were discussed.     

The gloom of the COVID-19 shock in the hospitality industry: A study of consumer risk perception and adaptive belief in the dark cloud of a pandemic

As the new coronavirus (COVID-19) spreads globally, the hospitality industry is at the heart of implementing social distancing, a measure demonstrated to be effective in flattening the epidemic curve. Informed by the perceived risk theory, this research examines how the customer’s perception of the shock of the coronavirus pandemic impacts on their beliefs, and how their beliefs could influence their anticipated emotions (negative and positive) which could affect their future desire towards visiting restaurants. Structural equation modelling was used to understand the research constructs’ associations. This study provides two key suggestions: (i) that the hospitality industry is built on trust from their customers by supporting and resourcing consumers’ self-protection behaviour and adoptive belief, and (ii) that the economic influence and the continuous uncertainty and transformation of the restaurant business need the enhancement of localisation strategies, practices and performance.     

Preference for robot service or human service in hotels? Impacts of the COVID-19 pandemic

Robots and artificial intelligence (AI) technologies are becoming more prominent in the tourism industry. Nowadays, consumers are faced with multiple options involving both human and robot interactions. A series of experimental studies were implemented. Four experiments demonstrated that consumers had a more positive attitude toward robot-staffed (vs. human-staffed) hotels when COVID-19 was salient. The results were different from previous studies, which were conducted before the COVID-19 pandemic. Since the moderating role of perceived threat in consumers’ preference for robot-staffed hotels was significant, the respondents’ preference was attributed to the global health crisis. This research provides a number of theoretical and managerial implications by improving the understanding of technology acceptance during a health crisis.     

Vulnerability of financial markets in India: The contagious effect of COVID-19

This study aims to examine the impact of COVID-19 on financial markets, using emerging market data. Specifically, panel data regression is applied on 3200 observations for daily market returns during lockdown in India. The event study methodology is adopted to show abnormal returns registered in the lockdown period. A contrasting breakdown effect of COVID-19 on various Indian industries has been observed through sectoral analysis. The study also provides empirical evidence for lockdown measures taken by the government on stock market returns and post lockdown impact of COVID-19 on daily market returns for over 6550 observations.     

Implied Equity Duration: A Measure of Pandemic Shutdown Risk

Implied equity duration was originally developed to analyze the sensitivity of equity prices to discount rate changes. We demonstrate that implied equity duration is also useful for analyzing the sensitivity of equity prices to pandemic shutdowns. Pandemic shutdowns primarily impact short‐term cash flows, thus they have a greater impact on low‐duration equities. We show that implied equity duration has a strong positive relation to U.S. equity returns and analyst forecast revisions during the onset of the 2020 COVID‐19 shutdown. Our analysis also demonstrates that the underperformance of “value” stocks during this period is a rational response to their lower durations.     

Past Experiences,Personality Traits,and Risk Aversion: Evidence from Individual Risk Attitudes during the COVID-19 Pandemic

Individuals’ risk attitudes play an important role in economic decision making and policy evaluation, particularly in the midst of unprecedented uncertainty caused by the COVID-19 pandemic. We adopt a multiple-price-list elicitation method with real money incentives to measure precisely individuals’ risk attitudes at different stake levels and the extent to which they are affected by personal and social shocks following the COVID-19 outbreak in China. We find that subjects who had previously experienced negative personal shocks are more risk-averse at medium and large stakes but more risk loving at very small stakes. For our sample, COVID-19 has no significant impact on risk attitudes, as it is more likely to be regarded as a social shock. The result indicates that the impact of COVID-19 on individual risk attitudes is not as influential as expected, unless the individual’s personal life is affected directly.