Capital structure of hospitality and tourism-related firms: Unveiling the impact of COVID-19 pandemic on European firms with different size and ownership structure

The COVID-19 pandemic has imposed an unprecedented impact on economies around the world. The hospitality and tourism-related sectors were among the hardest-hit industries. This empirical study examines the impact of the pandemic on the capital structure decisions of hospitality and tourism firms operating in five related industries. Our analysis also focuses on identifying this impact across different firm sizes and ownership structures, using a dataset of 94,588 firms from 31 European countries over the period 2012–2021. The findings reveal that leverage is higher during the pandemic across all industries, with the effect being more pronounced in small and publicly listed firms than in larger and private ones. However, the gambling and sports sectors show inconsistent results. • This study examines the pandemic’s impact on the capital structure of hospitality and tourism firms of different sizes and ownership structures. • Using a dataset of 94,588 firms across 31 European countries from 2012 to 2021, this study assesses leverage changes during the pandemic. • The empirical results reveal that there was a greater increase in the leverage position of small and private firms during the pandemic. • Policymakers should develop targeted measures to support small and public firms facing financial stress during crises.