Comparative Analysis of the Financial Performance of Tourism Companies Located in Central and Eastern Europe

Measuring performance in tourism and hospitality services in general raises issues given the very idiosyncratic nature of tourism. The measurement of performance in tourism and hospitality services, as reflected in the literature, was done from various perspectives: from the perspective of efficiency, from the perspective of labor productivity, from the perspective of measurements in use (industry-specific indices), from the perspective of competitiveness and from the perspective of performance measurement. In this paper, we proposed a composite index to measure the financial performance of the tourism and hospitality services companies that combines the most common financial indicators: ROE, ROA, solvency and ROS. The tourism and hospitality companies covered in this study were selected from a larger database provided by IMIS containing the top 1.000 companies located in 5 Central and Eastern European countries: Croatia, Hungary, Romania, Serbia and Slovenia. These companies were analyzed and clustered based on different criteria: annual turnover, type of activity, location, number of employees, assets, net profit, return on equity, return on investment, solvency, debt analysis, so on. The IMIS database provided complete information regarding all accounting or financial variables over the 5-year period from 2014 to 2018. From the perspective of the composite index, a number of up to 15 companies from each country out of the 5 taken into account (Croatia, Hungary, Romania, Serbia and Slovenia) are analyzed. The selection criterion of the companies was the size of the annual turnover and number of employees. The analysis shows both the differences in financial performance and the specifics of the differences, reflected in the values of the financial indicators, specific for each country. Also, the PERF indicator managed to highlight the decline of financial results in tourism in 2016 which was signaled by the World Travel and Tourism Council caused by the fact that the sector was hurt by economic weakness, Brexit uncertainties and a ramp-up in terrorist attacks.