Economics at your fingertips  

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

Tomas Heryan ()

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis, 2017, vol. 65, issue 6, 1925-1933

Abstract: 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.

Keywords: Czech Republic; FX interventions; tourism; hotel industry (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (text/html) (application/pdf)
free of charge

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

DOI: 10.11118/actaun201765061925

Access Statistics for this article

Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis is currently edited by Markéta Havlásková

More articles in Acta Universitatis Agriculturae et Silviculturae Mendelianae Brunensis from Mendel University Press
Bibliographic data for series maintained by Ivo Andrle ().

Page updated 2022-07-16
Handle: RePEc:mup:actaun:actaun_2017065061925