The impact of Covid-19 on Portuguese Accommodation Sector Default

Purpose: Worldwide travel restrictions and other measures to mitigate the pandemic situation caused a period of instability for accommodation companies. The consequences of this global phenomenon are still being explored. This study aims to understand the impact of Covid-19 on the probability of not fulfilling its obligations (default risk) and on its determinants in the Portuguese accommodation sector.Methodology: A Logistic regression on a panel data of 8,688 companies located in Portugal, from 2017 to 2022 was used.Results: The results show that Covid-19 contributed to an increase in the percentage of defaulters. Moreover, the pandemic situation had an impact on what determines financial difficulties. The determinants are different depending on the period analyzed, and the company’s size.Originality: This study adds empirical evidence on the impact of non-payment in the accommodation sector in Portugal and, to the best of our knowledge, there is a lack of literature on the impact of Covid-19.Keywords: Default risk; Accommodation sector; Logistic regression; Covid-19; Portugal.DOI: 10.58869/EJABM11(2)/07