PROFITABILITY PERFORMANCE ANALYSIS ON MALAYSIAN HOTEL INDUSTRY DURING COVID-19 PANDEMIC
Keywords:
profitability, leverage, liquidity, net asset turnover, size of the companyAbstract
The COVID-19 pandemic is becoming the worst worldwide and the increasing number of cases in
Malaysia has impacted the tourism industry heavily, especially hotel businesses. The cancellation by
travelling agencies due to the pandemic has affected various hotels. As a result, the companies had to
shut down their businesses and stop operating as they failed to maintain their profits and they suffered
losses. This study aims to examine the determinants of profitability in the hotel sectors in Malaysia
from 2010 to 2019. The profitability level of the firms is evaluated using four different variables which
are leverage, liquidity, net asset turnover, size of the company and panel data analysis techniques. The
present study gathered data on hotels listed under Bursa Malaysia. The findings showed that the
leverage and net asset turnover have a positive relationship with profitability while liquidity and size of
a company have a negative relationship with profitability. The study also found that leverage and size
of the company have a statistically significant relationship with profitability while liquidity and net
asset turnover do not have a statistically significant relationship with profitability. This finding provides
a better understanding for hotels to improve their financial performance and to have a better plan of
their spending assets and leverage. Therefore, it can help the hotel sector to sustain and have recovery
planning to prevent issues related to debt default payment in the future.
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