The Risk of Investing in the Construction of a Recreational Facility During a Pandemic

Abstract

The potential success of the hotel business in Slovakia has been associated with a relatively high degree of uncertainty over the last two years. Slovak Government Guideline No. 4/DzPaÚ/2019/MÚ on recreation allowances introduced an obligation for larger employers to reimburse employees for part of their recreation expenses from 2019, creating increased demand for Slovak recreational facilities. On the other hand, the same government, through various restrictions issued in connection with the COVID-19 pandemic, has caused recreational operators problems during this period, not infrequently even existential ones. In this situation, investment in the construction of new hotel- type leisure facilities is burdened by the impact of various factors in the external business environment. The present paper is devoted to the estimation of the risks associated with the construction of hotel-type recreational facilities in the conditions of the ongoing COVID-19 pandemic in Slovakia. The present estimation is performed using the Analytic Hierarchy Process (AHP) method implemented under the assumption of three possible scenarios of development of the external economic environment in the period of the pandemic. Relevant pairwise comparisons forming the input to the AHP method for each alternative are the result of expert assessment of the impact of selected factors.