Conceptual Study on Socio-Economic Impact of the Decline in Firm Performances of Hotels in Sri Lanka

Abstract

The study aims to determine the socio-economic impact of the decline in firm performances of hotels in Sri Lanka. Evidence from previous research found that 91% of the hotels listed in the Colombo Stock Exchange (CSE) were in the distress zone and this study aims to fill the prevailing knowledge gap by determining the socio-economic impact of this decline. The study will be conducted using a sample of 33 hotels listed under the consumer services sector of the CSE, by considering the firm performance as the independent variable while the dependent variable is the socio-economic impact. The firm size was considered as the moderating variable. Indicators such as Return on Equity (ROE), Return on Assets (ROA) and occupancy rate derived from annual reports and other publications was used to measure firm performance while several indicators derived from statistical reports published by the Sri Lanka Tourism Development Authority (SLTDA) and Central Bank will be used to measure socio-economic impact. The research will be conducted during a period of 10 years from 2009 to 2019. Findings from the research will contribute to the existing literature on the assessment of socio-economic impacts and are beneficial to a variety of stakeholders such as hotel managers, government, tourist development authorities and upcoming researchers.