| Abstract: |
The paper has focused on financial management of medium-sized hotels and
travel agencies in eight selected Central and Eastern European (CEE)
countries. According to a business finance theory, there should be inverse
relation between liquidity and profitability of companies. In general, if
managers decrease firm's liquidity through investing into the fixed assets
they should increase firm's profitability, which is caused by possible higher
earnings from those investments. The aim of the study is to estimate how is
profitability of those profitable tourism companies affected by selected
financial variables, and decide whether the business finance theory is valid
also within tourism industry among selected CEE countries. Annual data from
Amadeus, the international statistical database are obtained from 1,957 hotels
and 785 travel agencies from Bulgaria, Croatia, the Czech Republic, Hungary,
Poland, Romania, Slovakia, and Slovenia. General Methods of Moments (GMM) with
panel data is used as the main estimation method for period from 2006 to 2015.
However, results of the paper have shown that the business finance theory is
not valid either within both types of tourism companies nor among all selected
CEE countries. Furthermore, it is obvious that a conflict between managers of
tourism companies and their owners should have been paid more attention. A
creating of retained earnings within the stockholders' funds when owners had
reinvested the earnings back to the business had particular significance for
tourism companies' profitability within the period affected by the global
financial crisis, even in the case of those profitable companies. |