Abstract
The aim of the present research is to explore the issue of earnings predictability of a sample of hospitality firms before and after the burst of financial crisis in the Greek economy in 2011. Earnings predictability is considered as a prominent feature of accounting quality and has several implications for investors. For this reason we utilized a sample of organizations registered on the Greek chamber of commerce during the fiscal years 2004–2007 (pre-crisis period) and 2011–2013 (post-crisis period). Those firms were operating on the hospitality and food services sectors, leading to 343 observations for analysis. Regression analysis pointed out that the cash flow component of earnings is a more significant determinant of future earnings relative to accruals. Also the persistence of the cash flow component of earnings has decreased after the burst of the crisis and this is attributed to the lower levels of earnings predictability during that period. Our study adds to the existing literature on earnings predictability and persistence of the hospitality industry, suggesting fruitful policy indications.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
References
Alonso-Almeida, M. M., & Bremser, K. (2013). Strategic responses of the Spanish hospitality sector to the financial crisis. International Journal of Hospitality Management, 32, 141–148. https://doi.org/10.1016/j.ijhm.2012.05.004.
Bouranta, N., Psomas, E. L., & Pantouvakis, A. (2017). Identifying the critical determinants of TQM and their impact on company performance: Evidence from the hotel industry of Greece. The TQM Journal, 29(1), 147–166. https://doi.org/10.1108/TQM-11-2015-0142.
Dewally, M., Shao, Y., & Singer, D. (2013). The liquidity crisis: Evidence from the US hospitality industry. Tourism Economics, 19(3), 545–563. https://doi.org/10.5367/te.2013.0214.
Dimitropoulos, P. (2018). Profitability determinants of the Greek hospitality industry: The crisis effect. In V. Katsoni & K. Velander (Eds.), Innovative Approaches to Tourism and Leisure (pp. 405–416). Switzerland: Springer. https://doi.org/10.1007/978-3-319-67603-6_31.
Gaio, C. (2010). The relative importance of firm and country characteristics for earnings quality around the world. European Accounting Review, 19, 693–738. https://doi.org/10.1080/09638180903384643.
Gkliatis, I. P., & Koufopoulos, N. (2013). Strategic planning practices in the Greek hospitality industry. European Business Review, 25(6), 571–587. https://doi.org/10.1108/EBR-08-2012-0045.
Hatzidakis, A. (2015). Trends in tourism activity: 2008–2015. Athens: National Tourism Organization. (in Greek).
Hua, N., Nusair, K., & Upneja, A. (2012). Financial characteristics and outperformance: Evidence of a contemporary framework from the US lodging industry. International Journal of Contemporary HospitalityManagement, 24(4), 547–593. https://doi.org/10.1108/09596111211226833.
Iatridis, G., & Dimitras, A. (2013). Financial crisis and accounting quality: Evidence from five Europeancountries. Advances in International Accounting, 29(1), 154–160. https://doi.org/10.1016/j.adiac.2013.03.001.
IOBE. (2012). The effect of tourism on the Greek economy (p. 2012). Athens: IOBE.
Jeon, S., Kang, I., & Lee, S. (2004). The relationship between persistence of abnormal earnings and the usefulness of accounting information in hotel companies. Tourism Management, 25, 735–740. https://doi.org/10.1016/j.tourman.2003.09.010.
Jeon, S., Kim, J., & Lee, S. (2006). The persistence of abnormal earnings and systematic risk. Tourism Management, 27, 867–873. https://doi.org/10.1016/j.tourman.2005.05.003.
Kang, T., Krishnan, G. V., Wolfe, M. C., & Yi, H. S. (2012). The impact of eliminating the 20-F reconciliation requirement for IFRS filers on earnings persistence and information uncertainty. Accounting Horizons, 26, 741–765. https://doi.org/10.2308/acch-50250.
Kormendi, R., & Lipe, R. (1987). Earnings innovations, earnings persistence and stock returns. Journal of Business, 60, 323–345. http://www.jstor.org/stable/2352874.
Kousenidis, D. V., Ladas, A. C., & Negakis, C. I. (2013). The effects of the European debt crisis on earnings quality. International Review of Financial Analysis, 30, 351–362. https://doi.org/10.1016/j.irfa.2013.03.004.
Oei, R., Ramsay, A., & Mather, P. (2008). Earnings persistence, accruals and managerial share ownership. Accounting and Finance, 48, 475–502. https://doi.org/10.1111/j.1467-629X.2007.00248.x.
Pappas, N. (2015). Marketing hospitality industry in an era of crisis. Tourism Planning and Development, 12(3), 333–349. https://doi.org/10.1080/21568316.2014.979226.
Parte-Esteban, L., & Ferrer-García, C. (2014). The influence of firm characteristics on earnings quality. International Journal of Hospitality Management, 42, 50–60. https://doi.org/10.1016/j.ijhm.2014.06.008.
Richardson, S. A., Sloan, R. G., Soliman, M. T., & Tuna, I. (2005). Accrual reliability, earnings persistence and stock returns. Journal of Accounting and Economics, 39, 437–485. https://doi.org/10.1016/j.jacceco.2005.04.005.
Sloan, R.G. (1996). Do stock prices fully reflect information in accruals and cash flows about future earnings? The Accounting Review, 71, 289–315. Stable URL: http://www.jstor.org/stable/248290.
Song, H., Dwyer, L., Li, G., & Gao, Z. (2012). Tourism economics research: A review and assessment. Annals of Tourism Research, 39(3), 1653–1682. https://doi.org/10.1016/j.annals.2012.05.023.
Trombetta, M., & Imperatore, C. (2014). The dynamic of financial crises and its non-monotonic effects on earnings quality. Journal of Accounting and Public Policy, 33(3), 205–302. https://doi.org/10.1016/j.jaccpubpol.2014.02.002.
Author information
Authors and Affiliations
Corresponding author
Editor information
Editors and Affiliations
Rights and permissions
Copyright information
© 2019 Springer Nature Switzerland AG
About this paper
Cite this paper
Dimitropoulos, P.E., Vrondou, O., Koronios, K. (2019). Earnings Predictability of the Greek Hospitality Industry During the Crisis. In: Katsoni, V., Segarra-Oña, M. (eds) Smart Tourism as a Driver for Culture and Sustainability. Springer Proceedings in Business and Economics. Springer, Cham. https://doi.org/10.1007/978-3-030-03910-3_43
Download citation
DOI: https://doi.org/10.1007/978-3-030-03910-3_43
Published:
Publisher Name: Springer, Cham
Print ISBN: 978-3-030-03909-7
Online ISBN: 978-3-030-03910-3
eBook Packages: Business and ManagementBusiness and Management (R0)