Macro-environment and financial resilience: a longitudinal analysis of the “Mediterranean Tourism paradox” in the Greek hospitality sector (2005–2024)
Abstract
This study examines the influence of macro-environmental forces on the financial performance of hospitality businesses using the extended PEST-DG model as a mapping mechanism. The main objective of the research is to transform exogenous environmental variables into specific data by directly linking them to the measurable accounting indicators of tourist accommodation units. The research processes an unbalanced panel of 86 companies (2–3★, 4–5★ hotels and platform-based operators), using the Hausman-Taylor estimator to incorporate time-invariant variables that fixed effects models are unable to determine. Financial performance is approximated through three indicators in six sub-periods (2005–2024) aligning the empirical part with the PEST-DG theoretical framework. First, the “Mediterranean Paradox” is confirmed, where increasing arrivals do not ensure business profitability. Second, the superiority of Return on Assets (ROA) in asset-light models (Airbnb) is structural but is accompanied by a non-linear “leverage penalty” that increases vulnerability to debt. Third, the star category only affects through interactions in times of crisis and finally, paradoxically, Capital Controls improved profit margins, imposing digital payments that limited the underground economy. The study proposes to shift the revenue strategy from arrivals volume to tourism receipts and to calibrate the support mechanisms based on the asset structure of each category. Furthermore, it highlights that the exclusive use of the ROA indicator to evaluate Airbnb operators is misleading, as high leverage acts as a vulnerability multiplier that undermines profitability in times of crisis. This study is the first application of the Hausman-Taylor estimator in the field of hospitality financial management in the Mediterranean region. Furthermore, it offers the first verified profitability comparison between traditional hotel units and operators based on digital platforms; to the authors’ knowledge, the first such comparison in the Mediterranean hospitality context, made possible by the unique natural experiment of Law 4472/2017. From a methodological point of view, the PEST-DG framework evolves from a qualitative strategic tool to a fully traceable quantitative map.