University of Hertfordshire

Working capital management and firm performance in the hospitality and tourism industry

Research output: Contribution to journalArticlepeer-review

View graph of relations
Original languageEnglish
Article number103144
Number of pages11
JournalInternational Journal of Hospitality Management
Early online date13 Jan 2022
Publication statusPublished - 1 Apr 2022


The aim of this study is to provide empirical evidence concerning the effects of working capital on firm performance in the hospitality and tourism industry. We identify an inverted U-shaped relationship between working capital and firm performance. More specifically, the U-shaped relationship exists for accommodation, food and travel firms. In contrast, a positive linear relationship is valid for sport firms while changes in working capital have no effect on performance for gambling firms. To the best of our knowledge, this study is the first empirical research study to extend cross-country analysis in respect of sub-hospitality and tourism industries to a worldwide context. The findings suggest that hospitality and tourism managers should consider the diversity of relationships between working capital and firm performance in sub-hospitality and tourism industries when deciding on an appropriate strategy for working capital management.


© 2022 Elsevier Ltd. All rights reserved. This is the accepted manuscript version of an article which has been published in final form at

ID: 26666257