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The stock price reaction of the COVID-19 pandemic on the airline, hotel, and tourism industries

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  • Carter, David
  • Mazumder, Sharif
  • Simkins, Betty
  • Sisneros, Eric

Abstract

This paper investigates the stock market performance from the second half of February through the latter portion of March 2020 for U.S. travel-related firms (airlines, restaurants, and hotels) in response to the COVID-19 pandemic. Clearly the reduction in travel was negative news for the travel industry; however, we focus on the factors used by market participants to price the information into stock prices. We find that larger firms with greater cash reserves and higher market-to-book ratios experienced less negative returns, while firms with greater leverage were penalized more. Additionally, we find that cash reserves were particularly important for hotels.

Suggested Citation

  • Carter, David & Mazumder, Sharif & Simkins, Betty & Sisneros, Eric, 2022. "The stock price reaction of the COVID-19 pandemic on the airline, hotel, and tourism industries," Finance Research Letters, Elsevier, vol. 44(C).
    • Handle: RePEc:eee:finlet:v:44:y:2022:i:c:s1544612321001288
    DOI: 10.1016/j.frl.2021.102047
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    References listed on IDEAS

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