The study aims to determine the socio-economic impact of the decline in firm performances of hotels in Sri Lanka. Evidence from previous research found that 91% of the hotels listed in the Colombo Stock Exchange (CSE) were in the distress zone and this study aims to fill the prevailing knowledge gap by determining the socio-economic impact of this decline. The study will be conducted using a sample of 33 hotels listed under the consumer services sector of the CSE, by considering the firm performance as the independent variable while the dependent variable is the socio-economic impact. The firm size was considered as the moderating variable. Indicators such as Return on Equity (ROE), Return on Assets (ROA) and occupancy rate derived from annual reports and other publications was used to measure firm performance while several indicators derived from statistical reports published by the Sri Lanka Tourism Development Authority (SLTDA) and Central Bank will be used to measure socio-economic impact. The research will be conducted during a period of 10 years from 2009 to 2019. Findings from the research will contribute to the existing literature on the assessment of socio-economic impacts and are beneficial to a variety of stakeholders such as hotel managers, government, tourist development authorities and upcoming researchers.
The study uses an indicator approach to assess the socioeconomic impact on tourism in developing countries, using Sri Lanka as a case. Tourism is a flourishing sector in Sri Lanka that was affected by different aspects such as pandemics, terrorism, and economic, social, and political instabilities. Though the effects of these events have been studied separately, studies done to assess the socio-economic impact of tourism in Sri Lanka using an indicator approach are scarce; hence the study aims to fill this prevailing knowledge gap. Based on data availability, the study uses secondary data from Sri Lanka Tourism Development Authority and Central Bank reports of Sri Lanka from 2010 to 2019. The socio-economic impact of tourism is measured using integral indicators calculated using the coefficients and weights of the data collected. The study concludes that tourism in Sri Lanka has had a positive socioeconomic impact and has increased continuously since 2010 except in 2019, due to the aftermath of the Easter Sunday attacks in April 2019. This study indeed provides a stepping stone to study the Sri Lankan Tourism Sector which is currently going through political and economic turmoil.
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