An economic and financial analysis of tourism firms operating in outdoor tourism

Abstract

In an era of globalization, the growing number of leisure trips led to mass tourism in a scale prone to generate economic growth. However, and despite the economic impacts, mass tourism can also generate negative impacts on ecological, social and economic terms and a need for a sustainable tourism development has been envisioned. Sustainable tourism is related to a more environmentally friendly tourism, while ensuring viable, long-term economic operations, through providing fairly distributed socio-economic benefits to all stakeholders, including employment and income-earning opportunities. Understanding how sustainable tourism can be developed is important for destinations, to identify regional policies and to potentiate its attractiveness to tourists, who are increasingly looking for cultural and nautical activities and experiences in close contact with nature. The nature activities are appealing to firms, not only because of its potential economic profit, but also because they may require less infrastructures and, thus, less costs. Hence, this paper analyses the financial data of tourism firms operating in nature/adventure, cultural or nautical activities in Northern Portugal. Traditional sustainability measurement tools include non-integrated, regional and integrated indicators/indices. This paper draws the conceptual analysis on measurement of economic sustainability. In particular, here economic sustainability encompasses mainly financial costs and benefits and, thus, a financial analysis is performed. Data on touristic firms in the Northern Portugal, by tourism typology, are collected from the National Tourism Registry and financial data are collected from SABI database. Firms operating in more than one tourism typology were withdrawn. From the registered 732 firms, 9% operate exclusively in nature/adventure tourism; 74% in cultural tourism, and 17% in nautical tourism. A set of indicators of profitability and financial structure and leverage are applied to a sample of 386 firms. However, results show that firms operating in nature tourism do not exhibit the highest levels of profitability