The Impact of COVID-19 on Attitudes towards Growth Capacity of Tourism Firms: Evidence from Greece

Abstract

The aim of this study was to examine the overall impact of the COVID-19 outbreak on the growth capacity of tourism firms in Greece during the first wave of the pandemic. To this end, questionnaires were distributed in 548 tourism enterprises operating throughout Greece within different sub sectors (hotels, travel agents, restaurants, etc.) of the domestic tourism industry. Structural equation modeling (SEM) was employed for analyzing data. The results indicated that COVID-19 negatively influenced the growth capacity of tourism firms, which in turn affected their overall performance. In particular, the negative impact on growth capacity is reflected in dimensions such as managing economic losses and meeting financial obligations. On the other hand, factors such as psychological pressure and fear had no direct impact on the growth capacity of Greek companies during the first wave of the pandemic. A slight association between psychological pressure and growth capacity was detected, which needs further scientific investigation to be supported. Overall, the study highlighted how health crises influence the dynamics and operation of firms operating in the tourism sector, offering useful insights for addressing similar turbulences in future. In this context, domestic tourism authorities should take measurers for improving the growth capacity of Greek firms in periods of turmoil to ensure sustainability in the sector.