The Impact of COVID-19 on Attitudes towards Growth Capacity of Tourism Firms: Evidence from Greece

Abstract

The aim of this study was to examine the overall impact of the COVID-19 outbreak on the growth capacity of tourism firms in Greece during the first wave of the pandemic. To this end, questionnaires were distributed in 548 tourism enterprises operating throughout Greece within different sub sectors (hotels, travel agents, restaurants, etc.) of the domestic tourism industry. Structural equation modeling (SEM) was employed for analyzing data. The results indicated that COVID-19 negatively influenced the growth capacity of tourism firms, which in turn affected their overall performance. In particular, the negative impact on growth capacity is reflected in dimensions such as managing economic losses and meeting financial obligations. On the other hand, factors such as psychological pressure and fear had no direct impact on the growth capacity of Greek companies during the first wave of the pandemic. A slight association between psychological pressure and growth capacity was detected, which needs further scientific investigation to be supported. Overall, the study highlighted how health crises influence the dynamics and operation of firms operating in the tourism sector, offering useful insights for addressing similar turbulences in future. In this context, domestic tourism authorities should take measurers for improving the growth capacity of Greek firms in periods of turmoil to ensure sustainability in the sector.

1. Introduction

The outbreak of the novel coronavirus disease (COVID-19) in late 2019 sparked a global health crisis of unprecedented proportions, leading to profound socio-economic disruptions across the world [1]. One of the industries most severely affected by the pandemic is the tourism sector [2], which serves as a cornerstone of economic activity for many countries, including Greece. As a nation with rich historical heritage, beautiful landscapes, and vibrant cultural offerings, Greece has long relied on tourism as a crucial driver of economic growth and employment [3].

The COVID-19 pandemic, marked by its rapid spread and the subsequent implementation of stringent public health measures, had far-reaching implications for the tourism industry in Greece [4]. The necessary restrictions on travel, lockdowns, and social distancing protocols led to an almost immediate halt in international and domestic tourism activities. Consequently, tourism firms experienced an unprecedented shock that disrupted their operations, financial stability, and growth trajectories [5,6].

Considering the above, this quantitative research paper aims to delve comprehensively into the multifaceted repercussions of the COVID-19 pandemic on the growth capacity of tourism firms in Greece. Through the application of quantitative analysis, the study seeks to provide an empirically grounded understanding of the challenges encountered by tourism firms in Greece and the mechanisms they have deployed to safeguard and potentially enhance their growth prospects. In particular, by employing a structural equation modeling (SEM) methodology, this paper contributes to the existing body of knowledge pertaining to crisis management within the tourism sector. The study aims to uncover trends, associations, and predictive patterns that can inform decision-making processes, recovery strategies, and future resilience efforts. This empirical approach is poised to provide a data-driven assessment of the intricate relationship between the pandemic and the growth trajectory of tourism firms on a global basis by focusing on the case of Greece. Moreover, the current study could offer strategic insights for tourism firms in navigating post-pandemic challenges and seizing new opportunities. This might involve adapting to new market conditions, leveraging digital transformation for marketing and operations, and diversifying products and services to meet changing consumer demands. Furthermore, exploring how the pandemic has affected the momentum towards sustainable tourism development in Greece could provide a critical perspective on balancing economic recovery with environmental and social sustainability goals. This includes assessing shifts in attitudes towards overtourism, local community benefits, and environmental conservation.

Finally, the use of SEM allows the examination of complex causal relationships between variables, providing insights into how different aspects of the COVID-19 pandemic affect the growth capacity of tourism firms. This is a step beyond what most quantitative studies offer as SEM can account for latent variables and model multiple relationships simultaneously, offering a more nuanced understanding of the underlying mechanisms. In particular, SEM’s ability to model direct and indirect effects offers deeper insights into the structure of the relationships. This makes it possible to pinpoint specific areas for intervention or support by policymakers and stakeholders in the tourism industry. In particular, the detailed causal relationships uncovered can inform policymakers about the most effective areas for support and intervention, potentially leading to more nuanced and effective policy measures to aid the recovery and growth of the tourism sector in Greece.

In the ensuing sections, this paper outlines the theoretical framework that underpins the quantitative analysis, reviews pertinent literature concerning the effect of the COVID-19 pandemic on the growth capacity of tourism businesses, expounds on the research methodology utilized, and subsequently presents and interprets the empirical findings along with a discussion. As noted earlier, by employing quantitative research to illuminate the nuanced dynamics shaping the growth capacity of tourism firms amidst the pandemic, this study strives to contribute valuable insights toward informed decision making, recovery planning, and the enduring sustainability of Greece’s tourism industry in the post-pandemic landscape.

2. Literature Review

2.1. Growth Capacity of Firms and Organizations

Growth capacity of firms refers to a firm’s inherent ability to expand, increase its scale of operations, and achieve growth in terms of revenue, market share, and other relevant metrics [7,8]. It encompasses the resources, capabilities, strategies, and external conditions that allow a firm to effectively and sustainably grow over time [8]. In the literature, authors [8,9,10,11,12] mention several factors that contribute to firm’s growth capacity, namely: resources, capabilities, leadership, innovation, knowledge threshold, networking, etc.

Likewise, the growth capacity of tourism firms, especially in the context of the hospitality and travel industries, involves the ability of these firms to expand their operations, attract more customers, and increase revenue while maintaining service quality and profitability [13,14,15]. Given the unique nature of the tourism industry, there are specific factors that contribute to the growth capacity of tourism firms, such as: market demands and trends, diversification of offerings, service quality, technology integration, sustainability initiatives, crisis management and resilience, etc. [13,15,16,17]. In essence, the growth capacity of tourism firms is intricately tied to their ability to adapt to changing market dynamics, deliver exceptional experiences, and strategically position themselves within the broader tourism landscape [18]. The firms that effectively leverage these factors are more likely to achieve sustainable growth while contributing positively to the tourism industry and the economies in which they operate [13,19].

2.2. Impact of COVID-19 on Growth Capacity of Tourism Firms—Firm Factors

The impact of the COVID-19 pandemic on the growth capacity of tourism firms has been substantial and multifaceted. The first wave of the pandemic brought about unprecedented challenges to the global tourism industry, disrupting operations, causing financial strain, and fundamentally altering traveler behavior. For example, several authors highlight the negative and severe impact of COVID-19 on reputation and customer base of tourism firms [20,21,22], whereas others underline the particularly large drop in turnover [2,20,21,22,23] and in market share [20]. Tourism firms experienced a significant decline in demand since fear of infection, uncertainty, and changes in consumer priorities led to a sharp decline in travel demand. Tourism firms faced reduced bookings, cancellations, and dwindling occupancy rates.

Therefore, many companies, particularly small and medium-sized businesses, faced financial distress due to revenue losses and ongoing fixed costs. This impacted their ability to invest in growth initiatives. In this context, reductions in permanent staff [23,24,25,26] and employees’ salaries took place [23,24].

Moreover, growth capacity of firms was also affected due to difficulties in meeting financial obligations. Indicatively, Sharma and Nicolau [27] and Xiong et al. [28] distinguish four main types of these difficulties: (a) meeting financial obligations to public organizations, (b) banks, (c) suppliers, and (d) fixed operational needs. Overall, the COVID-19 pandemic demonstrated the importance of financial preparedness and resilience for businesses as well as the need for governments and institutions to intervene during times of crisis to mitigate the impact on the economy.

Furthermore, other scholars support that the most intense impact of the COVID-19 outbreak was directly on the growth potential of tourism firms. In this perspective, the pandemic negatively influenced the ability of firms to design new tourism products and services and to enter new markets [29]. Likewise, the pandemic affected tourism firms’ ability to: complete investment programs [4], promote the image of their company [29], and create new jobs [23,25,30,31].

In conclusion, the effect of the COVID-19 outbreak on growth capacity of tourism firms was reflected in two main dimensions: (a) severe economic losses and (b) difficulties in meeting financial obligations. Considering the above and focusing on the case of Greece, the two following hypotheses are formulated:

H1. 

Economic losses due to COVID-19 pandemic had an impact on tourism firms’ growth capacity.

H2. 

Difficulties in meeting financial obligations due to the COVID-19 pandemic had an impact on tourism firms’ growth capacity.

Complementary to the above, in the literature it was stated that the COVID-19 outbreak directly influenced the growth capacity of tourism firms, which in turn negatively influenced their overall performance [32,33]. Therefore, the following hypothesis can be formulated:

H3. 

A negative impact on the growth capacity of tourism firms due to the COVID-19 pandemic negatively influences their overall performance.

In other words, growth capacity has a mediating effect on the overall impact of the COVID-19 pandemic on the performance of tourism enterprises.

2.3. Personal Factors

The COVID-19 outbreak had also a severe psychological impact on the professionals and employees of the tourism industry [4]. Indicatively, authors such as Liu et al. [34] and Sigala [29] mention that pandemics increase fear among workers. Hence, COVID-19 probably caused fears for the personal health of employees [34], for the health of friends and family [34], and for the health of colleagues [29,34]. It should be noted that employees in the tourism industry, especially those in customer-facing roles such as hospitality, travel, and entertainment, were exposed to a higher risk of contracting the virus due to direct contact with travelers. This fear for their health and safety led to increased stress and anxiety, potentially affecting their overall well-being and performance [35,36]. To address these challenges and support employee performance, businesses in the tourism industry needed to prioritize employee well-being, provide clear communication about safety measures, and offer training to ensure that the staff were equipped to handle the new protocols [36,37]. Considering the above, and by linking the issue of fear with the growth capacity of tourism firms, the following hypothesis is formulated:

H4. 

Fear among employees due to the COVID-19 pandemic had an impact on tourism firms’ growth capacity.

Finally, tourism professionals and workers faced intense psychological pressure due to increased uncertainty and job insecurity. More specifically, the constantly evolving nature of the pandemic and the associated restrictions created uncertainty in the sector. Employees were often unsure about the stability of their jobs, leading to decreased job satisfaction and potential impacts on their performance [29,38,39,40,41]. Additionally, Pathak and Joshi [42] write that the psychological pressure caused by the COVID-19 pandemic is mirrored in four main aspects: (a) lack of confidence in decision making, (b) lack of logical thinking and planning, (c) difficulty in finding solutions to business problems, and (d) difficulty in performing everyday job tasks. Taking into account the above, the last research hypothesis is formulated as follows:

H5. 

Psychological pressure among employees due to the COVID-19 pandemic had an impact on tourism firms’ growth capacity.

Figure 1 shows the conceptual framework of the study that was developed based on the literature analysis presented above.

3. Research Method

3.1. Research Process

A quantitative approach was used. In particular, questionnaires were handed out via Internet to employees, business owners, and professionals that were working in tourism firms operating in Greece. Simple random sampling (SRS) was used; in total, 548 valid responses were gathered from April 2020 to June 2020. In the Greek tourism industry, there are three main sub-sectors, namely: hospitality, bars and restaurants, and travel agencies. Therefore, the chosen population was divided into these three categories. As a rule of thumb, researchers aimed to gather more than 30 responses from each subsector, thus facilitating the process of analysis. A larger sample size (n > 30) helps researchers to reduce the impact of outliers or anomalies in the data and increases the power of the statistical tests to detect significant differences [43,44]. Furthermore, responses came from almost all the major tourist destinations of the country. Considering that the total population of tourism professionals in Greece is 948,000 employees [45], the ideal sample size is N > 384, with a confidence level of 95% and a margin of error of 5%. Therefore, the total size of the sample (N = 548) was considered adequate. Moreover, the size of the sample was large compared with the sizes of the samples of other similar studies.

Table 1. Sample demographics.

Personal Characteristics
Gender	n	%
Male	360	65.7
Female	188	34.3
Age
18–24	7	1.3
25–34	107	19.5
35–49	293	53.5
50–65	133	24.3
>65	8	1.5
Educational level
High school	118	21.5
University/College	267	48.7
Master’s degree and/or PhD	163	29.7
Work experience in the tourism industry (in years)
<1	6	1.1
1–4	43	7.8
5–9	96	17.5
10–14	83	15.1
15–19	89	16.2
≥20	231	42.2
Position in the company
Owner/CEO	270	49.3
Employee	278	50.7
Total	548	100.0
Firms’ Characteristics
Legal form	n	%
Sole proprietorship	146	26.6
General partnership (OΕ)	67	12.2
Limited liability company	39	7.1
S.A.	172	31.4
Franchise	3	0.6
Member of a group	70	12.8
Other	51	9.3
Years of operation
<1	15	2.7
1–4	64	11.7
5–9	86	15.7
10–14	93	17.0
15–19	60	10.9
≥20	230	42.0
Industry
Hospitality	320	58.4
Bars and restaurants	76	13.9
Travel agencies	75	13.7
Other services	77	14.1
Total	548	100.0

shows the demographic features of the sample:

3.2. Research Instrument

In the current study, the questionnaire developed by Gavriilidis and Metaxas [4] was used. In particular, this research instrument was based on analysis of the literature since each item came from previous studies (see

Table A1. Items of the questionnaire.

Extent of the Negative Impact of COVID-19 on the Overall Function of Greek Tourism Enterprises	Sources
Firm factors—negative impact of COVID-19 on…
Reputation and customer base (clientele)	[20,21,22]
2. Revenue and turnover	[2,20,21,22,23]
3. Market share	[20]
4. Reductions in permanent staff	[23,24,25,26]
5. Difficulty in meeting financial obligations in public organizations	[15,16]
6. Difficulty in meeting financial obligations to banks	[27,28]
7. Difficulty in meeting financial obligations to suppliers	[27,28]
8. Difficulty in meeting fixed operational needs	[27,28]
9. Reductions in employees’ salaries	[23,24]
10. Designing new products and services	[29]
11. Changing the mode in which the company operates	[29,54]
12. Ability to complete an investment program	[4]
13. Ability to promote the image of the company	[29]
14. Ability to create new jobs	[23,25,30,31]
15. Ability of the company to enter new markets	[29]
Personal factors
16. Fear for personal health	[34]
17. Fear for the health of loved ones	[34]
18. Fear for the health of employees	[29,34]
19. Feeling uncertain about the financial viability of the firm	[29,38]
20. Anxiety about closing the firm	[29,38]
21. Anxiety for sustaining current jobs	[29,38]
22. Anxiety for meeting financial obligations	[29,38]
23. Negative psychology in managing customer relationships	[29]
24. Negative psychology in managing relationships with the staff	[29]
25. Negative sentiment with friends and family	[4]
26. Lack of confidence in decision making	[42]
27. Lack of logical thinking and planning	[42]
28. Difficulty in finding solutions to business problems	[42]
29. Difficulty in performing everyday job tasks	[42]
30. Evaluating the extent of the negative impact of COVID-19 on the overall function of an enterprise	[4]

(1 = Very small extent, 7 = To a great extent).

). However, each question was adjusted to the Greek reality and to the research objectives of the current paper. The research instrument included two main sections. The first section measured the impact of COVID-19 on firms whereas the second section focused on the effects of the pandemic on people. A final question was added that measured the overall impact of the COVID-19 pandemic on the performance of Greek tourism firms. All items were in a seven-point rating form (1 = to a very small extent; 7 = to a great extent). Cronbach A index was used for testing the reliability of each section. In all cases, A was larger than 0.9, thus revealing the reliability of measurement [46,47].

3.3. Methods of Analysis

Analysis of data was conducted with SPSS v.25, JASP, and the Lavaan package. The “lavaan” package is a popular statistical analysis package in the R programming language that uses SEM and related techniques. Firstly, Kolmogorov–Smirnov and Shapiro–Wilk tests were employed for testing the normality of the data. As expected, data did not follow the normal distribution; in several cases, they were skewed since the impact of COVID-19 on the performance of firms was intense. This trend was also observed in histograms representing the distribution of the data. However, as stated by Piovesana and Senior [48], sample sizes larger than 85 generate stable means and standard deviations regardless of the level of skewness. Secondly, exploratory factor analysis (EFA) was employed for classifying the dimensions of the impact of the COVID-19 pandemic on the operation of Greek tourism firms. Subsequently, confirmatory factor analysis (CFA) was used for refining and validating the results of the EFA. In particular, reliability and convergent and discriminant validity were tested. Lastly, in the third stage, structural equation modeling (SEM) was used. Covariance-based SEM was employed, using the maximum likelihood method (ML) for parameter estimation. Missing data were handled by excluding cases listwise.

4. Results

4.1. Exploratory Factor Analysis (EFA)

Firstly, EFA was conducted using the Varimax rotation with the principal component approach. As shown in

Table 2. EFA results.

	Construct	Items	Factor Loadings	Cronbach A
Psychological impact	F1: Psychological pressure	Negative psychology in managing customer relationships	0.741	0.918
		Negative psychology in managing relationships with the staff	0.746
		Negative sentiment with friends and family	0.799
		Lack of confidence in decision making	0.815
		Lack of logical thinking and planning	0.848
		Difficulty in finding solutions to business problems	0.758
		Difficulty in performing everyday job tasks	0.593
	F2: Fear towards the effects the new virus health	Fear for the effects on personal	0.778	0.858
		Fear for the health of loved ones	0.877
		Fear for the health of employees	0.836
Economic impact	F3: Meeting financial obligations	Difficulty in meeting financial obligations to public organizations	0.738	0.930
		Difficulty in meeting financial obligations to banks	0.735
		Difficulty in meeting financial obligations to suppliers	0.705
		Difficulty in meeting fixed operational costs	0.727
	F4: Growth capacity	Unable to create new products/services	0.666	0.814
		Unable to complete an investment program	0.598
		Unable to promote the image of the company	0.541
		Unable to create new job positions	0.725
		Inability of the company to enter new markets	0.615
	F5: Economic losses	Negative impact of the reputation of the firm	0.655	0.687
		Decrease in market share	0.617
		Reduction in permanent staff jobs	0.545
	Kaiser–Meyer–Olkin	0.928
	Sig.	0.000

, from the EFA, five factors were derived, following the paradigm of Gavriilidis and Metaxas [4]. Two factors were related with the psychological impact of COVID-19 on entrepreneurs and tourism professionals (F1: psychological pressure; F2: fear about the effects of the new virus on human health), whereas three factors were related with the economic impact (F3: meeting financial obligations; F4: growth capacity; F5: economic losses). KMO value was 0.928, and Bartlett’s Test of Sphericity was statistically significant at 0.000, revealing the suitability of the data for factor analysis [46,47].

4.2. Confirmatory Factor Analysis (CFA)

CFA was used for testing the validity of EFA. As stated by Lance and Vandenberg [49], CFA is a statistical technique used to test the hypothesized factor structure of a set of observed variables. It is often used after conducting EFA to validate and confirm the factor structure identified in the exploratory phase. Several factors were removed due to relatively low factor loadings. The final measurement model is illustrated in

Table 3. CFA results.

Factor	Indicator	Loadings	AVE	CR
Psychological pressure	Lack of confidence in decision making	0.866	0.680	0.894
(PP)	Lack of logical thinking and planning	0.901
	Negative sentiment with friends and family	0.707
	Difficulty in finding solutions to business problems	0.812
Fear for the new virus	Fear for personal health	0.761	0.677	0.862
(FEAR)	Fear for the health of loved ones	0.900
	Fear for the health of employees	0.802
Meeting financial obligations	Difficulty in meeting financial obligations to banks	0.898	0.781	0.915
(MFO)	Difficulty in meeting financial obligations to suppliers	0.895
	Difficulty in meeting fixed operational costs	0.858
Growth capacity	Unable to complete an investment program	0.737	0.612	0.825
(GC)	Unable to promote the image of the company	0.880
	Inability of the company to enter new markets	0.721
Economic losses	Decrease in market share	0.731	0.430	0.692
(EL)	Reduction of permanent staff jobs	0.623
	Negative impact on the reputation of the firm	0.606

CFI = 0.957, TLI = 0.945, NFI = 0.940, GFI = 0.976, RMSEA = 0.065, SRMR = 0.045.

. In particular, three factors were removed from the dimension of psychological pressure, one factor was removed from the dimension of financial obligations, and two factors were removed from the dimension of growth capacity. Overall, the final measurement model met the criteria mentioned by Hair et al. [50], namely: CFI = 0.957, TLI = 0.945, NFI = 0.940, and GFI = 0.976. In addition, root mean square error of approximation (RMSEA), and standardized root mean square residual (SRMR) were less than 0.08 in both cases (0.065 and 0.045, respectively), following the criteria mentioned by Hooper et al. [51]. Furthermore, composite reliability (CR) in all cases was larger than 0.60, as stated by Fornell and Larker [52]. In the same length, convergent validity was established since average variance extracted (AVE) was greater than 0.5. Only in one case, AVE was lower that 0.5; however, as mentioned by Fornell and Larker [52], if AVE is less than 0.5 but CR is higher than 0.6, the convergent validity of the construct can be adequate. Finally, discriminant validity was also ensured since the roots of AVE were greater than the correlations among dimensions (

Table 4. Discriminant validity.

Construct	CR	AVE	PP	FEAR	MFO	GC	EL
PP	0.894	0.680	0.824
FEAR	0.862	0.677	0.335	0.822
MFO	0.915	0.781	0.410	0.218	0.883
GC	0.825	0.612	0.420	0.236	0.629	0.782
EL	0.692	0.430	0.399	0.246	0.515	0.547	0.655

The square root values of AVE are shown on the diagonal.

).

4.3. Structural Model

Figure 2 shows the results of the structural model. In particular, goodness-of-fit criteria revealed that overall, the model had a good fit in the data: CFI = 0.956, TLI = 0.945, NNFI = 0.945, GFI = 0.992, RMSEA = 0.060, and SRMR = 0.045.

Table 5. Hypotheses testing.

Hypotheses	Structural Coefficient	p Value	Status
H5: Impact of PP on growth capacity	0.120	0.016	Rejected
H4: Impact of fear on growth capacity	0.004	0.924	Rejected
H2: Impact of MFO on growth capacity	0.314	<0.001 *	Accepted
H1: Impact of EL on growth capacity	0.407	<0.001 *	Accepted
H3: Impact of growth capacity on the overall performance of tourism enterprises due to COVID-19	0.192	<0.001 *	Accepted

Note: Structural coefficients marked with * represent relationships that are significant at p < 0.001.

shows the results of the structural relationships. As shown below, overall, the COVID-19 outbreak negatively influenced the growth capacity of Greek tourism firms, which in turn negatively influenced their overall performance (p < 0.001). Growth capacity is mainly influenced by difficulties in meeting financial obligations (p < 0.001) and economic losses (p < 0.001). On the other hand, no direct association was identified between fear and growth capacity (p = 0.924). Lastly, the effect of psychological pressure on growth capacity was weaker. In particular, it was statistically significant at p < 0.05 but not at p < 0.01. It seems that there are loose links between these two terms.

5. Discussion

The aim of this study was to examine the overall impact of the COVID-19 outbreak on the growth capacity of tourism firms in Greece during the first wave of pandemic. The research showed that health crises such as the COVID-19 pandemic mainly influence the growth capacity of tourism firms, which in turn severely affects their overall performance. There are three main components of growth capacity that were affected by the pandemic: (1) inability of the firms to enter new markets, (2) inability to complete an investment plan, and (3) inability to promote the image of the company. The importance of these factors was also mentioned in the studies of several writers in the academic literature [4,13,14,15,29].

Firstly, the pandemic has disrupted global trade and travel, making it challenging for businesses to expand into new markets. Lockdowns, restrictions, and supply chain disruptions have limited the ability of Greek firms to explore and establish themselves in new geographic areas. This has impacted their potential for growth by reducing the customer base and revenue streams they could tap into. Secondly, many Greek enterprises had investment plans in place to expand operations, improve infrastructure, or develop new products/services. The economic uncertainty caused by the pandemic led to a decline in consumer demand, disrupted financial markets, and reduced cash flow for many businesses. As a result, they might have had to postpone or scale down these investment plans, which can hinder their growth and competitiveness in the long term. Lastly, lockdowns and social distancing measures limited traditional marketing and promotional activities applied by domestic tourism firms. Businesses faced challenges in connecting with their target audience, building brand awareness, and maintaining a positive company image.

In short, the pandemic’s impact on these components highlights the broader challenges that businesses faced in maintaining growth trajectories during such a crisis. While some tourism firms were able to pivot and find new opportunities, many had to navigate a complex landscape of restrictions, changing consumer behaviors, and economic uncertainty.

The research also showed that the negative impact on Greek tourism firms’ growth capacity due to the COVID-19 pandemic is mainly affected by difficulties in meeting financial obligations and managing economic losses, something that was also mentioned in other studies [20,21,22,24,25,26,27,28]. Financial obligations to banks and suppliers, as well as fixed operational costs, were the main barriers that Greek firms faced, which had a direct negative impact on their growth dynamics. Therefore, government policies should focus on supporting companies to meet these obligations during crisis, ensuring the sustainability of the sector. In terms of economic losses, the most important were decreases in market share, reductions in permanent staff jobs, and negative impacts on the reputation of firms.

On the other hand, factors such as psychological pressure and fear did not have a direct impact on the growth capacity of Greek tourism firms during the first wave of the COVID-19 pandemic. Growth capacity is probably affected mainly by firm and economic factors. However, it is difficult to make a precise distinction between psychological and firm factors since they are linked by relationships that are not always apparent. Indicatively, a slight association between psychological pressure and growth capacity was detected, which needs further scientific investigation and documentation, following the paradigms of the studies of Mao et al. [39] and Tu et al. [41].

6. Practical Contributions and Implications

Overall, the COVID-19 pandemic had a profound impact on the growth capacity of tourism firms in Greece. The domestic tourism industry was one of the hardest-hit sectors due to travel restrictions, lockdowns, and concerns about public health. As a response, state authorities should implement various public policies to enhance the growth capacity of Greek tourism firms in the aftermath of the COVID-19 pandemic. These policies aim to support recovery, stimulate demand, and create a more resilient and sustainable tourism industry. In this context, some common strategies that should be employed that derive from the findings of the current research are:

-

Financial support and stimulus packages.

-

Tax incentives: these could include reduced VAT or sales tax rates for tourism-related services such as accommodation, transportation, and entertainment.

-

Investment in infrastructures (transportation networks, attractions, etc.).

-

Organization of public campaigns that promote cultural heritage and unique experiences.

-

Establishment of clear health and safety protocols: these standards will help restore consumer confidence by ensuring that travelers can enjoy their trips without unnecessary health risks.

-

Training programs for tourism industry workers to upgrade their skills and adapt to new trends such as digital marketing, contactless service, and sustainability practices.

-

Broad support of small and medium enterprises (SMEs), which constitute the backbone of the Greek economy (grants, loans, and capacity-building initiatives).

-

Focus on sustainability by promoting eco-friendly practices, supporting local communities, and protecting natural and cultural resources.

-

Provide incentives for the digital transformation of the industry.

These public policies could provide immediate relief and promote long-term recovery and growth for Greek tourism firms. The effectiveness of these measures depends on factors such as the severity of the pandemic’s impact, the responsiveness of the tourism industry, and the level of cooperation between governments and private-sector stakeholders. Considering the vital role that the tourism industry plays for the Greek economy in terms of employment and turnover, the implementation of the aforementioned policies gains crucial importance and concerns the overall response of state authorities in upcoming health crises in the future.

7. Research Limitations

Research limitations of the current paper include the following issues. Firstly, the impact of COVID-19 on the growth capacity of Greek tourism firms may be influenced by factors that were not reported in this study. Other unexplored factors could be essential to understanding the full impact of COVID-19. Secondly, as stated by Mandic et al. [53], the design of the study was cross-sectional, capturing data at a specific point in time and, particularly, during the first wave of the COVID-19 pandemic. Longitudinal research could lead to a broader understanding of the long-term effects of COVID-19 on the domestic tourism industry. Thirdly, the findings of the study may be specific to the Greek context and may not be applicable to other regions or countries with different tourism markets and government responses to the pandemic. Finally, the effect of vaccination was not taken into account since at the time of the survey, vaccines against COVID-19 had not yet been developed.

8. Suggestions for Further Research

Considering the above, future papers can examine the long-term effects of the COVID-19 pandemic on the Greek tourism industry by using longitudinal designs. Moreover, other studies can use samples coming from two (or more) different countries and tourism markets for making comparisons and identifying challenges and opportunities specific to Greece. Furthermore, other papers can focus on the examination of the impact of the pandemic on local tourism communities in Greece, including social, economic, and environmental implications. This research could generate sustainable development strategies. Lastly, future studies can analyze the level of preparedness of tourism firms in Greece for future crises and propose strategies for enhancing resilience in the face of unforeseen challenges.

9. Conclusions

The aim of this study was to examine the impact of the COVID-19 outbreak on the growth capacity of tourism firms in Greece during the first wave of the pandemic. The results indicated that COVID-19 negatively influenced the growth capacity of tourism firms, which in turn affected their overall performance. In particular, the negative impact on growth capacity is reflected in dimensions such as managing economic losses and meeting financial obligations. On the other hand, factors such as psychological pressure and fear did not have a direct impact on the growth capacity of Greek companies during the first wave of the pandemic. A slight association between psychological pressure and growth capacity was detected, which needs further scientific investigation and documentation to be supported. Overall, the study highlighted how health crises influence the dynamics and operation of firms operating in the tourism sector, offering useful insights for addressing similar turbulences in future. In this context, domestic tourism authorities should take measures for improving the growth capacity of Greek firms in periods of turmoil, thus ensuring the sustainability of the sector.