Beyond Tourism Market Recovery: Financial Vulnerability and Operational Drivers of Hotel Profitability

Tourism recovery and hotel firm profitability do not necessarily move in lockstep. This paper examines the extent to which aggregate demand recovery is translated into firm-level financial performance, introducing the concept of a tourism-to-profitability conversion gap. The study combines bibliometric mapping of hotel performance research with a firm-level econometric analysis of an unbalanced panel of 4159 Spanish hotel firms classified under CNAE 5510 over 2015–2024, representing approximately 38,651 firm-year observations from SABI. Fixed-effects models are estimated using return on assets as the main dependent variable. The results show that leverage is consistently and negatively associated with profitability, and that this association became stronger during the COVID-19 period, as indicated by negative and significant leverage×COVID-19 interaction terms. Labour productivity is positively related to profitability, whereas labour cost intensity and fixed-asset intensity are negatively associated with returns when not matched by sufficient revenue generation. Median ROA fell from 3.7% pre-COVID-19 to −0.9% during the pandemic and recovered to 5.7% post-COVID-19 among surviving firms; however, the modest post-COVID-19 coefficient in the baseline model suggests that aggregate recovery indicators may conceal substantial heterogeneity in firm-level financial recovery. The paper reframes post-crisis hotel recovery as a firm-level financial transmission process: the conversion of renewed tourism demand into accounting profitability appears conditioned by balance-sheet vulnerability, labour productivity, cost structure, and asset rigidity, mechanisms that remain less central in the broader hotel performance literature.