Level of pandemic consequences for the indebtedness of the Slovak hospitality sector

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The financial impact of the COVID-19 pandemic on entire economies has been proven. The current necessity is to determine the level of consequences for distinct industries and sectors. The local lockdowns and travel restrictions shocked the hospitality industry and its performance. Thus, the purpose of this study is to explain the effect of the pandemic on a particular economic sector, specifically NACE I (Accommodation and food service activities), and changes in financial indicators in Slovak circumstances for the period 2016–2021. The study focuses on debt ratios that reflect the financial stability of businesses. Friedman’s test was run to determine how the chosen indebtedness indicators developed over the chosen years. Based on a sample of 321 Slovak companies, statistically significant differences were found. But only the interest coverage ratio was significantly different between the pre-pandemic and pandemic eras, according to the post-hoc tests. In addition, there was a hint of a positive overall transformation in the sector of accommodation and food service activities. The decline of the number of enterprises by total indebtedness from the alarming threshold in 2021 declared this fact. The conclusions implicate that Slovak businesses are becoming more mindful of debt financing and are attempting to reduce the risks of going bankrupt.

Acknowledgment
This research was financially supported by the Slovak Research and Development Agency – Grant Vega 1/0121/20: Research of transfer pricing system as a tool to measure the performance of national and multinational companies in the context of earnings management in conditions of the Slovak Republic and V4 countries and faculty institutional research 1/KE/2022: Analysis of the determinants of indebtedness and profitability of business entities in the European area.

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    • Table 1. Categorization according to the Orbis database
    • Table 2. Selected indebtedness ratios
    • Table 3. Frequencies of categories of the total indebtedness ratio
    • Table 4. Summary of total indebtedness hypothesis test
    • Table 5. Frequencies of categories of the self-financing ratio
    • Table 6. Summary of the hypothesis test of the self-financing ratio
    • Table 7. Frequencies of categories of the debt-to-equity ratio
    • Table 8. Summary of the debt-to-equity hypothesis test
    • Table 9. Summary of the credit indebtedness hypothesis test
    • Table 10. Frequencies of categories of the interest coverage ratio
    • Table 11. Summary of the interest coverage hypothesis test
    • Table 12. Frequencies of categories of the interest burden ratio
    • Table 13. Summary of the interest burden hypothesis test
    • Table 14. Summary of the equity leverage hypothesis test
    • Table 15. Results of the post-hoc tests to detect the impact of the COVID-19 pandemic
    • Conceptualization
      Katarina Valaskova, Pavol Durana, Tomas Kliestik, Simona Vojtekova
    • Data curation
      Katarina Valaskova, Pavol Durana, Tomas Kliestik, Simona Vojtekova
    • Funding acquisition
      Katarina Valaskova, Tomas Kliestik
    • Methodology
      Katarina Valaskova, Tomas Kliestik, Simona Vojtekova
    • Resources
      Katarina Valaskova
    • Validation
      Katarina Valaskova
    • Writing – original draft
      Katarina Valaskova, Pavol Durana, Tomas Kliestik, Simona Vojtekova
    • Writing – review & editing
      Katarina Valaskova, Pavol Durana, Tomas Kliestik, Simona Vojtekova
    • Formal Analysis
      Pavol Durana
    • Investigation
      Pavol Durana, Tomas Kliestik, Simona Vojtekova
    • Project administration
      Pavol Durana
    • Supervision
      Tomas Kliestik
    • Visualization
      Simona Vojtekova