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The impact of COVID-19 on hotel performance: Evidence from a Difference-in-Differences approach

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  • Polemis, Michael

Abstract

This note aims to investigate the impact of the national lockdown adopted by the Italian government on hotel performance. For this purpose, a difference-in-differences (DID) methodology is employed to compare the performance of the hotel industry in Italy and Turkey during the post-treatment period. The empirical findings based on a daily unbalanced panel data set indicate that the national lockdown adopted by the Italian government to stem the COVID-19 spread mitigated the level of hotel performance by 68% on average. Our empirical findings survive robustness checks to account for alternative proxies of hotel performance and the inclusion of time fixed effects on the model.

Suggested Citation

  • Polemis, Michael, 2020. "The impact of COVID-19 on hotel performance: Evidence from a Difference-in-Differences approach," MPRA Paper 102053, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:102053
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    File URL: https://mpra.ub.uni-muenchen.de/102053/1/MPRA_paper_102053.pdf
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    References listed on IDEAS

    as
    1. Sharma, Abhinav & Nicolau, Juan Luis, 2020. "An open market valuation of the effects of COVID-19 on the travel and tourism industry," Annals of Tourism Research, Elsevier, vol. 83(C).
    2. Qiu, Richard T.R. & Park, Jinah & Li, ShiNa & Song, Haiyan, 2020. "Social costs of tourism during the COVID-19 pandemic," Annals of Tourism Research, Elsevier, vol. 84(C).
    3. Mora, Ricardo & Reggio, Iliana, 2014. "dqd: A command for treatment effect estimation under alternative assumptions," UC3M Working papers. Economics we1407, Universidad Carlos III de Madrid. Departamento de Economía.
    4. Ricardo Mora & Iliana Reggio, 2015. "didq: A command for treatment-effect estimation under alternative assumptions," Stata Journal, StataCorp LLC, vol. 15(3), pages 796-808, September.
    5. Yeon, Jihwan & Song, Hyoung Ju & Lee, Seoki, 2020. "Impact of short-term rental regulation on hotel industry: a difference-in-differences approach," Annals of Tourism Research, Elsevier, vol. 83(C).
    6. Juan M. Villa, 2016. "diff: Simplifying the estimation of difference-in-differences treatment effects," Stata Journal, StataCorp LLC, vol. 16(1), pages 52-71, March.
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    Cited by:

    1. Thanasis Stengos & Michael L. Polemis, 2020. "Threshold effects during the COVID-19 pandemic: Evidence from international tourist destinations," Working Papers 2005, University of Guelph, Department of Economics and Finance.

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    More about this item

    Keywords

    COVID-19; Hotel industry; Lockdown; Difference-in-Differences; Italy;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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