Tax Evasion, Fraud Risk, and ESG Failures in Hospitality and Tourism: A Critical Literature Review and Conceptual Framework

Tourism and hospitality exhibit several conditions associated with elevated fraud risk: pronounced seasonality, a high prevalence of small- and medium-sized enterprises (SMEs), cash intensity and platform intermediation. This critical review synthesises international public-finance, forensic accounting and sustainable tourism research to build a conceptual framework that links tax non-compliance to Environmental, Social and Governance (ESG) vulnerabilities using a Fraud Diamond lens extended with tax-compliance theory. It examines three debates: (i) economic survival versus aggressive opportunism; (ii) technological determinism versus regulatory leakage; and (iii) institutional ESG metrics versus informal SME practice. Greece, which introduced real-time e-invoicing, short-term rental registries and the digital work card in sequence, serves as an illustrative case. Two constructs are derived. Compliance substitution holds that digital enforcement compresses fraud Opportunity for observed transactions but may displace concealment toward the least visible margin, so that reforms should be evaluated jointly on revenues, costs, labour declarations and sales channels. The ESG visibility asymmetry holds that the governance and social risks most acute in SME hospitality are those least captured by formal ESG metrics. Together, these constructs form the Tourism Fraud and Sustainability Trap framework, from which the review derives testable propositions, a policy matrix and a research agenda.