Title: Predicting the financial distress of Indian hotels: an empirical analysis using Altman scores

Authors: Ajay Kumar Patel; Swati Sharma; Shikha Jalota

Addresses: IMS Ghaziabad-Business School, Lal Kuan, G.T. Road, Ghaziabad, Uttar Pradesh – 201009, India ' Institute of Management Studies, Ghaziabad (University Courses Campus), National Highway – 09, Adhyatmik Nagar, Ghaziabad, Uttar Pradesh – 201015, India ' Institute of Management Studies, Ghaziabad (University Courses Campus), National Highway – 09, Adhyatmik Nagar, Ghaziabad, Uttar Pradesh – 201015, India

Abstract: The purpose of this paper is to assess the financial distress of Indian hotels by using Altman scores (Zo, Zs, and Zem). Further, it also endeavours to identify and suggest the Altman model and variables significant in assessing the financial distress for the hotel industry. The prediction models developed by Edward Altman, i.e., Z scores are applied to analyse possible financial distress conditions for hotels in India. The logistic panel regression model is applied to identify Altman model and variables significant in evaluating the financial distress of hotels. The findings suggest that more than 50% of hotels studied are under distressed condition as per all Altman's model, i.e., Zo, Zem and Zs scores. The Altman financial distress score results were similar to each other and also significantly similar to results identified by key financial indicators. The result revealed that all Altman models were significant, but the Zem model, for non-manufacturing firms in an emerging economy, had the highest number of significant variables.

Keywords: financial distress; FD; Altman Z scores; hotels; panel regression.

DOI: 10.1504/IJBPM.2026.152306

International Journal of Business Performance Management, 2026 Vol.27 No.2, pp.139 - 164

Received: 24 Oct 2023
Accepted: 07 Apr 2024
Published online: 16 Mar 2026 *

Full-text access for editors Full-text access for subscribers Purchase this article Comment on this article