TheImpactoftheCovid-19Pandemic
onInvestorSentiments:Evidencefrom12
SelectedMajorTourism-RelatedCompanies
Helena Nemec Rudež
University of Primorska,Slovenia
helena.nemec@fts.upr.si
To understand investor confidence and its change in tourism, which was
one of the industries most affected by the pandemic, the paper presentsthe
stock price movements of twelve major listed companies in the tourism
industry in the first year after the Covid-19 pandemic outbreak. The 1-
month interval of closing prices from January 1, 2020, before the pandemic
was announced, to April 1, 2021, is observed to assess investor confidence.
Investor confidence is compared between companies in different sectors
of the tourism industry. The pandemic itself has not had a clear impact
onstockpricesasithasdeveloped,showingthatsomeofthemrecovered
within a few months, while others have not, even a year after the outbreak
of the pandemic. Based on the one-year stock price movements after the
outbreak, three groups of tourism-related companies are identified.
Key Words: Covid-19 pandemic, tourism-related companies, stock price,
investor confidence
jel Classification: d53, l83, d25
Received: 23 July 2021 · Accepted: 13 October 2021
Published online: 31 March 2022 © Authors
https://doi.org/10.26493/1854-6935.20.43-58
Introduction
The tourism industry is one of the largest industries in the world. Before
the Covid pandemic, it generated (including its direct, indirect and in-
duced impacts) 10.6 of global jobs, 10.4 of global gdp, 6.8 of total
exportsand27.4ofglobalservicesexports(seehttps://wttc.org/Research
/Economic-Impact). Crises affecting tourism have been studied in the
past (e.g. Novelli et al. 2018; Aliperti et al. 2019; Jiang, Ritchie, and Benck-
endorff 2019). Tourism has faced terrorism (first intensified in Egypt in
1997, in the United States in 2001, later in Madrid in 2004 and London
in 2005), natural disasters (tsunami in Asia in 2004, wildfires in Greece
in 2018 and California in 2017, typhoon in Japan in 2018), global eco-
nomic crises in 2008/2009 and 2011, and health crises (foot-and-mouth
disease in the United Kingdom in 2001, sars in 2002). Some crises were
Managing Global Transitions 20 (1): 43–58

44 Helena Nemec Rudež
global, others regional or local. They also differ in the likelihood of their
occurrence and recurrence, in their permanence and in their impact on
the tourism industry. While tourism is sensitive to crises, shocks related
to tourist arrivals have been shown to be temporary. However, it takes
time to recover from crises and tourism policy makers need to respond
to crises in a timely manner (Yucel 2021).
In relation to pandemic shocks, Sigala (2020) highlights the impor-
tance of researching pandemic crises in tourism to better understand
the impact of the pandemic on different stakeholders. The impact of the
Ebola outbreak between 2014 and 2016 negatively affected stock prices
in tourism sectors in the geographical vicinity of the outbreak (Ichev
and Marinč 2018). However, ‘the coronavirus pandemic is unquestion-
ably unique and relevant to research’ (Zenker and Kock 2020, 1) and has
shaken investor confidence in the tourism industry worldwide due to
its magnitude and the travel restrictions imposed by governments at a
global level. Investor confidence is the result of the environment in which
the industry operates. When investors have high confidence in the com-
pany and its future earnings, the demand for the company’s stocks in-
creases and drives the stock price up. Conversely, when investors lose
confidence in the company and its future earnings, demand for the stock
decreases and a large amount of stock is sold in the market, driving the
price down. Baker and Wurgler (2007, 129) define consumer sentiment as
‘a belief about future cash flows and investment risks that is not justified
by the facts at hand’ and that (p. 149) ‘waves of sentiment have clearly dis-
cernible, important, and regular effects on individual companies and on
the stock market as a whole.’
According to Bodie et al. (1996), there are several factors that deter-
mine a company’s stock price and expected earnings, including the global
economy, domestic macroeconomics, demand and supply shocks, gov-
ernment policies, business cycles, and industry analysis. Fears of a pan-
demicinearly2020hadamajorimpactonthesefactors,causingmajor
stock market indices to fall sharply in the first half of March due to exten-
sive selling of stocks. The Covid-19 pandemic was a shock to the global
economy, and the tourism and transportation industries were hit partic-
ularly hard. Stock prices in 2020 followed a similar pattern with a sharp
decline in March 2020, with the entertainment and hospitality industry
performing the worst (losing more than 70 of market capitalization),
along with some other industries (petroleum and petroleum services and
real estate), and also with high volatility (20 on average) (Mazur, Dang,
Managing Global Transitions

TheImpactoftheCovid-19 Pandemic onInvestorSentiments 45
and Vega 2021). Actual and potential losses in tourism have affected the
stock prices of tourism-related companies. To find out how much indi-
vidual parts of the tourism industry were affected by the pandemic, the
study uses the stock prices of selected companies in tourism-related in-
dustries.
Since the pandemic is likely to continue for several years due to its
magnitude, and its effects are present in daily life, this paper examines
whether the industry can recover from the initial shock within one year.
Theheterogeneityofthetourismproductacrossthetourismindustryand
the different dependence on domestic tourism, and domestic and long-
distance travel in different types of the tourism industry mean that re-
covery takes different lengths of time in different types of the tourism
industry. For example, the restaurant industry relies more heavily on lo-
cals than other sectors of the tourism industry; online travel companies
where people can book their holidays and other tourism products, and
the accommodation industry, rely more heavily on short-haul and long-
haul travel; while cruise ships and airlines rely more heavily on long-haul
travel. The hypothesis is:
Investor sentiment, measured by stock prices, varies across tourism
sectors in the first year after the Covid pandemic outbreak.
The stock price performance of twelve major companies will be used to
determine how investors reacted to such an unprecedented shock in the
tourism industry and whether the tourism industry can recover within
oneyearfromsuchaninitialshock,whichwaslaterfollowedbyseveral
setbacks in the national and international economy and tourism.
The paper is organized as follows. In the next section a review of the
literature onstockprices oftourism/relatedcompaniesduringthe Covid-
19pandemicispresented.Then,themethodsanddatausedaredescribed.
Inthe fourth section the research findings are explained.The fifth section
is a discussion. In the last section, conclusions are drawn.
PertinentLiterature
Due to the uniqueness of Covid-19 crises in tourism, experience from
previous crises cannot be used, including the 2008/2009 financial cri-
sis, where a demand shock occurred, while Covid-19 pandemic crises af-
fected both demand and supply (Plzakova and Smeral 2022). Research
on tourism in Covid-19 pandemic times developed very quickly. The first
research papers on Covid-19 and tourism were published after the first
Volume20·Number1·2022

46 Helena Nemec Rudež
months of the pandemic outbreak, followed by extensive research in the
field. Due to the large scale of the pandemic, it is critical to understand
investor confidence in the tourism industry and its components, which is
driven by both irrational (based on emotion) and rational (based on in-
formation and facts) behaviour. Tourism investors in the us were more
driven by irrational behaviour and anticipation of bad scenarios, while
European investors were more influenced by rational behaviour (Reis and
Pinho2020).Separately,thetourismstockmarkethasproventobehighly
volatile due to the uncertainty surrounding the Covid-19 pandemic.
The initial research on investor sentiment towards future stock returns
focused on China, where the pandemic first spread. The decline in the
prices of 18 of the 21 tourism stocks traded on Chinese stock exchanges
was first noted in China after the announcement of the Wuhan lockdown
in January (Liew 2020b). Subsequently, a rapid decline in the stock prices
of three leading online travel companies (Booking Holdings Inc., Expe-
dia Group, Trip.com Group Ltd.) was observed from January to March
2020 (Liew 2020a). Following up on the returns in the early phase of
the pandemic (through April 2020), Sharma and Nicolau (2020) found
that four tourism sectors (i.e. hotels, airlines, cruise lines, and car rentals)
experienced a significant decline in valuations, with the impact of the
pandemic being greatest in the cruise industry, likely because business
tourism, which can recover earlier, is less present in the cruise indus-
try. Looking at the different sectors of the tourism industry separately
in February and March 2020, consumer confidence was low regardless of
sector(Nhamo,Dube,andChikodzi2020).Usingmorethan1,200differ-
ent tourism companies in 52 countries, Kaczmarek et al. (2021) show that
the stock prices of companies with low corporate valuation ratios, lim-
ited debt and intensive investment policies, low levels of individualism in
the national culture, and strong government policies and quick policy re-
sponses were more immune to the pandemic shock between January and
March 2020. Similarly, Carter et al. (2022) find that cash reserves and cor-
porate debt played an important role for investors in us travel companies
in the second half of February and March 2020. Lin and Falk (2021) anal-
yse the travel and leisure industry in three Nordic countries from June
2018 to June 2020 and find that the timing, probability, and duration of
the crisis regime depend on the composition of travel and leisure compa-
nies.
LaterinAugust2020,investorsre-enteredthestockmarketinantici-
pation of a recovery after the pandemic collapse in March 2020, and as a
Managing Global Transitions

TheImpactoftheCovid-19 Pandemic onInvestorSentiments 47
result, the stock prices of many companies rose to pre-pandemic levels.
Herrenbrueck (2021) pointed out that the pandemic generally increased
demand for savings instruments, which led to higher stock prices by Au-
gust 2020, assuming that the pandemic will be short, and no deeper crisis
will lead to corporate bankruptcies. Of course, stock prices are especially
difficulttoforecastintimesasunpredictableasthepandemic.V accina-
tion, which began in late 2020 and 2021, has changed investor sentiment
in general.
The contribution of the paper is to enhance the knowledge about the
diversity of tourism sectors as an investment opportunity. The paper
complements previous academic work by confirming that investor con-
fidence in different sectors of the tourism industry varies when a crisis of
unprecedented magnitude occurs, as is the case with the Covid-19 pan-
demic. The heterogeneity of the tourism sectors is not only a matter of
consumer perspective, but also of investor perspective.
DataandMethod
This paper examines the stock prices of twelve tourism-related compa-
niesfortheperiodfromJanuary1,2020toApril1,2021usingdatafrom
the website Yahoo Finance (https://finance.yahoo.com) to determine in-
vestor sentiment changes. The companies included in the sample are the
largest listed companies by market capitalization in various tourism sec-
tors. The stock price data of the sampled companies consist of closing
prices at one-month intervals. Some stocks are quoted in usd, others in
eur and gbp. The start date chosen is January 1, 2020, a date when stock
prices worldwide were not yet affected by the pandemic threat.
The study focuses on the stock price performance of twelve selected
major companies in the tourism industry that cover a significant mar-
ket stock in the world. Although the number of companies included in
the study is limited in order to provide a clear representation of each
stock, the companies included in the sample cover various sectors of
tourism, including the accommodation sector (Hilton Worldwide Hold-
ings Inc., Accor sa), restaurants and cafes (McDonald’s Corporation,
Starbucks, Domino’s Pizza), the travel sector (Booking Holdings Inc.,
Expedia Group, tui ag), the airline sector (EasyJet, Wizzair), and the
cruise market (Carnival, Royal Caribbean). The leading sharing econ-
omy company (Airbnb) is not included in the analysis as it did not go
public until December 2020. For the stocks included in the sample, the
minimum and maximum stock price is searched for the given time pe-
Volume20·Number1·2022

48 Helena Nemec Rudež
riod and the standard deviation, skewness, kurtosis and Jarque-Bera test
are calculated. The stock price during the selected period is presented in
charts rather than tables for simplicity, to illustrate the price movements
that express investor sentiment towards the companies in the sample.
Findings
The stock prices of the tourism-related companies in the sample show
an obvious pattern in stock price changes that reflects a negative impact
on stock prices. The 15-month period shows how investors react after the
initial price decline. The most obvious is a huge decline in stock prices
in March 2020, which has already been confirmed in several recent stud-
ies. Stock prices have been very volatile, showing the great uncertainty in
tourism and the unpredictable environment and future returns. Fears of a
pandemic were already present in February and early March before who
made the assessment that Covid-19 could be characterized as a pandemic
on March 11, 2020. The drop in stock prices at that time could be also a
result of other events, such as the 2020 U.S. election year or the oil price
warthatbeganonMarch8,20 20,andnottheemergingfearofapan-
demic. Later, the outbreak of the pandemic had an important impact on
investor sentiment in the tourism-related industry.
The lowest stock prices were recorded in March 2020 immediately af-
ter the pandemic outbreak was announced, or in early April (see table
1). The cruise market was the hardest hit. Most companies did not re-
coverbyearlyA pril2021andsomeofthemreachedthelowestinvestor
confidence later in May 2020 (tui ag, Accor) or October 2020 (Easy-
Jet). The standard deviation is very high for some stocks, which is due
to the high volatility during the Covid pandemic, already confirmed by
Acharya, Liu, and Zhao (2021). Thus, investor sentiment varied widely
across tourism sectors, suggesting that the perception of pandemic risk
varies across tourism stocks.
Skewness and kurtosis are used to perform the Jarque-Bera test, which
tests whether stock prices are normally distributed or not (table 1). The
Jarque-Bera test shows that the stock prices in the sample are not nor-
mally distributed, with the exception of tui ag, Domino’s Pizza and
Royal Caribbean Group. This is consistent with the study of Chaudhary,
Bakhshi, and Gupta (2020) that stock price returns are not normally dis-
tributed after the Covid pandemic.
AftertheshockinMarch,thestockpricesofsomecompanies(McDon-
ald’ s,Domino ’ sPizza,Starbucks,Hilton,Booking,Expedia)recoveredin
Managing Global Transitions

TheImpactoftheCovid-19 Pandemic onInvestorSentiments 49
table 1 Minimum and Maximum Closing Price of Tourism-Related Companies
in the Sample between 1 January 2020 and 1 April 2021
Company () () () () () ()
Booking
Holdings Inc.
,. usd
(//)
,. usd
(//)
. . –. .
(.)
Expedia Group
Inc.
. usd
(//)
. usd
(//)
. . –. .
(.)
tui ag . eur
(//)
. eur
(//)
. . –. .
(.)
McDonald’s
Corporation
. usd
(//)
. usd
(//)
. –. –. .
(.)
Starbucks . usd
(//)
. usd
(//)
. . –. .
(.)
Domino’s Pizza
Inc.
. usd
(//)
. usd
(//)
. –. . .
(.)
Wizz Air
Holdings plc.
,. gbp
(//)
,. gbp
(//)
. . –. .
(.)
EasyJet plc. . gbp
(//)
,. gbp
(//)
. . . .
(.)
Accor sa . eur
(//)
. eur
(//)
. . –. .
(.)
Hilton Worldwide
Holdings Inc.
. usd
(//)
. usd
(//)
. . –. .
(.)
Carnival
Corporation plc.
. usd
(//)
. usd
(//)
. . . .
(.)
Royal Caribbean
Group
. usd
(//)
. usd
(//)
. . . .
(.)
notes Column headings are as follows: (1) minimum stock price, (2) maximum stock
price, (3) standard deviation, (4) skewness, (5) kurtosis, (6) Jarque-Bera test ( p-value).
Based on data from Yahoo Finance (https://finance.yahoo.com).
the coming months. On the other hand, investor confidence remained
low in Accor, tui, EasyJet and the cruise companies until November
2020. After the effective Covid-19 vaccine was announced on November
9, 2020, and hopes of an end to the pandemic increased, investor confi-
dence in these stocks also increased slightly.
In 2021, tourism stock prices continued to be hurt by the sluggish vac-
cination programme in the first quarter. Some stock prices were also af-
fected by the suspension of dividends due to government financial sup-
port conditions or corporate decisions. Although the changes in stock
Volume20·Number1·2022

50 Helena Nemec Rudež











.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Booking(usd)





.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
Expedia(usd)




.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
tui(eur)
figure 1 Stock Price Movement of Travel Companies (Booking Holdings Inc.,
Expedia Group Inc., and tui ag) between 1 January 2020 and 1 April 2021
in 1-Month Interval (based on data from Yahoo Finance,
https://finance.yahoo.com)
prices in March 2020 showed a similar pattern of stock price decline, 7 of
the 12 companies in the sample reached a higher stock price level in early
April 2021 than in January 2020, showing investor confidence in tourism.
All stocks recovered significantly from the March 2020 shock, with the
second wave of the pandemic in the second half of 2020, with new travel
restrictions, delaying the recovery of stock prices in general. In Novem-
ber 2020, the stock market recovered after news of the Covid-19 vaccine
approval on November 9, 2020.
Figure 1 shows the stock price fluctuations of travel-related companies.
Close competitors Expedia and Bookingboth saw positive investor senti-
Managing Global Transitions

TheImpactoftheCovid-19 Pandemic onInvestorSentiments 51











.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
.
McDonald’s(usd)
Starbucks(usd)
Domino’sPizza(usd)
figure 2 Stock Price Movement of Restaurant Sector (McDonald’s Corporation,
Starbucks Corporation, and Domino’s Pizza Inc.) between 1 January 2020
and 1 April 2021 in 1-Month Interval (based on data from Yahoo Finance,
https://finance.yahoo.com)
mentinthefirstquarterof2021,eventhoughitwasnotyetclearwhenthe
pandemic wouldend. The reason is likely the fact that consumers can buy
tourism products in faraway destinations and accommodations in desti-
nations closer to home. Although travel companies are doing well one
year after the start of the pandemic, tui’s stock price is still low due to
the large losses from the pandemic and probably due to the large amount
of debt. Thus, the stock price of tui ag also reflects other financial is-
suesofthecompany ,whichdonotallowthestockpricetorecover .The
least affected by the pandemic is the restaurant industry. In fact, the stock
prices of fast food restaurants, cafes and pizza chains recovered immedi-
ately after the pandemic shock in March 2020 (see figure 2), which proves
that the restaurant and café industry is generally dependent on the local
population, including takeaways, and is independent of the tourism in-
dustry in many cities.
ThecomparisonbetweenthehotelcompaniesAccorandHilton(figure
4)andbetweenthelow-costairlinesWizzAirandEasyJet(figure3)shows
that investor confidence in the same industry differs between companies.
The airline and hotel industries have struggled with a sharp decline
in guests or passengers and uncertainty still persists; while Wizz Air and
Hilton have regained investor confidence a year after the pandemic be-
gan, EasyJet and Accor have not, likely due to different corporate issues.
This suggests that the pandemic itself does not have a clear impact on
Volume20·Number1·2022

52 Helena Nemec Rudež
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.
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WizzAir(gbp)
EasyJet(gbp)
figure 3 Stock Price Movement of Air Transport Industry Companies (Wizz Air plc
and EasyJet plc) between 1 January 2020 and 1 April 2021 in 1-Month
Interval (based on data from Yahoo Finance, https://finance.yahoo.com)
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Accor(eur)
Hilton(usd)
figure 4 Stock Price Movement of Accommodation Sector (Accor sa and Hilton
Worldwide Holdings) between 1 January 2020 and 1 April 2021 in 1-Month
Interval (based on data from Yahoo Finance, https://finance.yahoo.com)
stock price in 2021. Other company-related characteristics probably play
an equally important role.
Cruise lines were one of the sectors most affected by the Covid-19 pan-
demic(seefigure5).Thestockpricehasnotyetrecoveredtopre-Covid-19
epidemic levels as of April 1, 2021. Royal Caribbean and Carnival (which
alsoownsaccommodationbusinesses)postedlargenetlossesin2020due
to a sharp decline in revenues. This is likely due in part to the fact that
one of the first outbreaks of the Covid-19 pandemic was reported on the
Managing Global Transitions

TheImpactoftheCovid-19 Pandemic onInvestorSentiments 53

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RoyalCaribbean(usd)
Carnival(usd)
figure 5 Stock Price Movement of Cruise Industry (Royal Caribbean Group,
and Carnival Corporation & plc) between 1 January 2020 and 1 April 2021
in 1-Month Interval (based on data from Yahoo Finance,
https://finance.yahoo.com)
cruise ship Diamond Princess in February 2020, and authorities isolated
passengers on board for 14 days, leading to some criticism. Several other
cruise ships subsequently reported pandemic outbreaks on board among
crewandpassengers.Moreover,cruiseshipsrelyonleisuretourismrather
than business tourism as already pointed out by Sharma and Nicolau
(2020).
Stock price movements in tourism-related companies confirm find-
ings of Reis and Pinto (2020) that the Covid-19 pandemic has caused fear
and panic among economies and accumulated losses due to low demand,
but also created opportunities for stock price recoveries. One year after
the pandemic outbreak the investor fear has still not (completely) dis-
appeared. While half of the companies in the sample have reached the
pre-pandemic stock price by April, 2021, the other half of companies is
still faced with lower investor confidence.
Discussion
The wide range of businesses involved in tourism were hit hard by the
pandemic, as reflected in travel restrictions, border closures, and debt
burdens during the first year of the Covid-19 pandemic. Although stock
prices are the result of many different factors affecting the market envi-
ronment, the huge decline in the stock prices of listed companies in the
tourism industry immediately after the outbreak of the pandemic con-
firms that the stock prices were primarily affected by the pandemic. The
investor shock and its aftermath in the first year after the pandemic out-
break showed high standard deviation for several tourism-related com-
Volume20·Number1·2022

54 Helena Nemec Rudež
panies described in the study. However, governments’ financial interven-
tions likely mitigated the negative impact on stock prices.
Given that some stock prices were at higher levels on April 1, 2021 than
they were at the beginning of 2020, it is reasonable to assume that they
have recovered from the news of the pandemic outbreak and the ongoing
travel restrictions, and that the pandemic in general has not had a long
negative impact on investor sentiment, suggesting that a positive outlook
prevails in the industry. The positive outlook for the travel industry can
be inferred from investor confidence in travel companies such as Expe-
dia and Booking. In contrast, investor confidence in cruise companies
appears to have been low in the first year of the pandemic, likely due to
their reliance on leisure tourism. Similar to previous studies on the im-
pactofthe Covidpandemiconstockprices(Acharya, Liu,andZhao2021;
Chaudhary, Bakhshi, and Gupta 2020), high standard deviations of stock
prices and non-normally distributed stock returns were found.
Although stock prices were hardly affected by low investor confidence
immediately after the outbreak of the pandemic, the prices of differ-
ent companies moved in different directions after some time, showing
that investor confidence in the tourism industry was regained differently
across the industry. Based on the sample of twelve companies for which
the stock price performance is evaluated in the first year after the Covid-
19 pandemic, the companies could be classified into three groups.
• Group A includes the restaurant and café sector (McDonalds, Dom-
ino’s Pizza, Starbucks), whose stock prices recovered within a few
months of the outbreak of the pandemic and reached the stock price
level of early 2020 in September 2020. This is likely due to restau-
rants relying less on tourists and more on locals and food deliveries.
• Group B includes four companies whose stock price recovered
withinayearoftheMarch2020decline.StockpricesofBooking,Ex-
pedia, and Wizz Air clearly recovered by November, while Hilton’s
stock price took a year.
• Group C is the largest and includes five out of twelve companies in
the sample whose stock price did not recover to pre-pandemic levels
by April 2021, likely due to ongoing financial issues and/or contin-
ued travel restrictions and travel anxiety. These include companies
from various sectors of tourism, tui ag, EasyJet, Accor, Carnival,
and Royal Caribbean.
The hypothesis proposed is confirmed. Investor sentiment varied
Managing Global Transitions

TheImpactoftheCovid-19 Pandemic onInvestorSentiments 55
across tourism sectors in the first year following the outbreak of the
Covid pandemic. Restaurant businesses recovered more quickly from
the pandemic shock than other tourism sectors because they had previ-
ously relied on locals to deliver takeaway food. Online travel companies
(Booking, Expedia) also recovered by the end of 2020, likely due to the
variety of products they sell and travel closer to home. In the lodging
sector, the stock prices of two major companies are examined. Investor
confidence in Hilton has increased to pre-pandemic levels by the end of
2020, but Accor’s stock price has not. There is a difference also in the air-
line sector, showing that Wizz Air was able to regain investor confidence
to the pre-pandemic level by the end of 2020 while EasyJet had not. The
difference is probably due to the different company characteristics in this
sector. While online travel companies (Booking, Expedia) recovered by
the end of 2020, the stock price of tourism company tui ag remained
lower as online travel planning obviously gains more confidence in the
market. As for the cruise companies, investor confidence in Carnival and
Royal Caribbean had not yet returned to pre-pandemic levels a year after
the outbreak, likely due to the long-haul travel associated with cruises.
Thus, pandemic shocks have different impacts on different parts of the
tourism industry.
In terms of practical implications, we should bear in mind that, on
the one hand, the tourism industry is very sensitive to the health crisis,
but, on the other hand, the tourism industry is expected to recover be-
cause people are willing to travel. Therefore, tourism investors can limit
their risk by hedging their investments in the tourism industry and di-
versifying risk by investing in gold, bonds, real estate, and stocks of less
crisis-proneindustries(basicmaterialsandpharmaceuticals).Indeed,the
growth of tourism in the past has shown that investment in tourism can
bring competitive returns and therefore needs to be included in invest-
ment portfolios.
Conclusion
The recovery in the stock prices of various companies in 2021 shows that
investor confidence in the tourism market and tourism-related compa-
nies has increased, despite the still-present pandemic. After the initial
shock and panic in the stock market, investors reacted more rationally in
the following months, leading to a rebound in the stock prices of some
tourism-related companies. The stock prices over the period of 15 months
show that the decline in stock prices of some tourism-related companies
Volume20·Number1·2022

56 Helena Nemec Rudež
was temporary and has already returned to the previous level in April
2021, while investors are still cautious about some tourism-related com-
panies and are probably waiting for the travel restrictions to be lifted.
As pointed out by Mishra and Mishra (2020), tourism-related activities
and profitability opportunities for businesses will improve investor sen-
timent towards tourism investment and allow for more stable tourism
growth. Possible future pandemic outbreaks are likely to cause further
price volatility, although the market may have become accustomed to the
circumstances, similar to the terrorist attacks of recent decades. Never-
theless, new research examining investor reactions and sentiment to the
consequences of a pandemic over an extended period of time would be
welcome. In the second and third quarters of 2021, there is still uncer-
tainty about the pandemic, particularly about the spread of the various
Covid-19 variants. A possible expansion of the Covid-19 pandemic or a
new pandemic in the future should not be such a big shock to the tourism
industry, as people usually get used to a changed environment, as has
been the case with the terrorism threat in recent decades.
The paper has several limitations. The first limitation is that the stock
price movements do not take into account other firm characteristics, but
only the pandemic issue, to which everything else was subordinated in
the first year after the outbreak of the pandemic. The next limitation of
the study is that it is limited to twelve large firms in the tourism industry,
even though they have a large market stock in their sector. Less stringent
travel restrictions and vaccination procedures should improve investor
sentiment towards tourism. Therefore, it is recommended that further
research on investor confidence be conducted in the future, including
more companies. The stock price movements of large companies in the
tourism industry reveal relevant and important information and provide
lessons for investors and management to be better prepared for similar
future crises. Another limitation of this study is that it focuses on large
listed companies and does not reveal the sentiment of owners of smaller
companies in the tourism sector.
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