Were the Czech Hotels Able to Confront Current Appreciation of the Czech Currency Before the End of the Exchange Rate Commitment?

Abstract

HERYÁN TOMÁŠ. 2017. Were the Czech Hotels Able to Confront Current Appreciation of the Czech Currency Before the End of the Exchange Rate Commitment? Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 65(6): 1925Brunensis, 65(6): -1933 This paper has focused on the issue of foreign exchange markets in relation to tourism and hotel industry in the small open economy such as the Czech Republic. After more than three years when the Czech National Bank (CNB) intervened on the foreign exchange market, everybody look forward to development of exchange rates after the end of the exchange rate commitment. The aim of this study is to show how Czech hotels were been able to confront current appreciation of the Czech koruna before the CNB had ended the exchange rate commitment. According to this aim it was necessary to investigate relations between exchange rates and turnover of Czech hotels as the first. Therefore, it has been obtained time series of the hotels' profit and loss statements from Bureau van Dijk's Amadeus international statistical database as well as exchange rates from the CNB online database. Other data is from the Eurostat and the World Bank online statistical database. As the main estimation method it is used the GMM approach with panel data for period from 2007 till 2014. After the estimation of those statistical significant relations it is essential to describe the ways, how were the hotels been able to face the exchange rate risk before the end of the commitment. Furthermore, it has been differentiated between natural hedging for smaller hotels and the usage of the financial derivatives for these bigger. Three types of hedging are described: (i) natural hedging, (ii) usage of a currency forward, and (iii) taking a loan in foreign currency.

Managers of tourism companies can no longer expect any financial support from company owners: Different working capital management due to the global financial crisis

“…Technically, each result is checked in two ways. First, in terms of orthogonality by the Sargan-Hansen test (Sargan, 1958;Hansen, 1982). This test simply confi rms the null hypothesis above 0.05 saying that too many variables are not present in the equation and the GMM model is not oversized (Heryán & Tzeremes, 2017).…”

What Drives Liquidity of Tourism Companies? Microeconomic Evidence from Bulgaria, Czech Republic and Poland

“…Particularly, profitability decreased while stockholders' funds increased among Czech travel agencies. It should be highlighted that companies from the Czech Republic suffered due to exchange rate commitment taken by the Czech National Bank (Heryán, 2017a). In general, even though profitability of almost all categories of tourism companies was decreasing during the period affected by the global financial crisis, their liquidity was really supported through non-dividing this decreasing profit among company owners.…”