This study evaluates the relative effects of economic growth, industrial expansion, and firm-specific and contextual factors on corporate hotel performance in Sri Lanka. We use data from a sample of 29 listed hotels for 7 years from 2012 to 2018 and employ panel regression to uncover the relationship that exists between these variables. The findings suggest that the macroeconomic factors alone can account for a small part of the variance in return on assets and return on equity, and yet that these macroeconomic factors are the key drivers of the overall financial performance. Moreover, the selected macroeconomic factors, together with firm-specific and contextual factors, appear to have a profound impact on hotel performance. More specifically, growth in the number of tourist arrivals and growth in inflation are found to have a positive and significant impact on corporate hotel performance, while the interest rate has a significantly negative effect. Our findings with regard to the impact of growth in gross domestic product (GDP) on hotel performance are inconclusive. Furthermore, our findings reveal that the profitability of Sri Lankan hotels is driven by managerial efficiency, location factors, geographical diversification, and connection to a wider business network.

Sustainability is the limelight of many industries, especially in developing countries. In the hospitality industry, in particular, sustainability plays a pivotal role since it contributes immensely to the economy of a country. However, the hospitality industry is increasingly facing various challenges due to the uncertainty and instability in the business environment. Thus, the central focus of this study is to evaluate the sustainability performance of Sri Lankan hotels industry. For this purpose, 25 hotels were selected from the hotels listed in the Colombo Stock Exchange (CSE). In order to determine the sustainability performance of the selected hotel, we identified 18 indicators that represent the economic, environmental, and social and governance sustainability. Then, we developed a multidimensional sustainability performance index system and using entropy-based TOPSIS, the values of the individual indicators were aggregated. Eventually, we rank the hotels based on the TOPSIS scores, which represent the sustainability performance of hotels. The resulted TOPSIS scores reveal that the Sri Lanka hotels’ sustainable performance is moderately high. This indicates that there is a growing tendency to adopt more sustainable practices among hotels companies in Sri Lank. Recently, stakeholders in the state and private sector have paid much attention to the tourism industry because it has tremendous potential and many prospects, and the same is reflected in our results. While we are providing important implications for managers and policymakers, our findings urge the hotels with a lowlevel sustainability performance to go for more sustainable practices.