Intellectual capital before and during COVID-19 in the hotel industry: the moderating role of tangible assets

Abstract

Purpose: The study aims to assess the relative impact of intellectual capital (IC) as opposed to tangible assets on profitability and employee performance in hotels in Serbia before and during the coronavirus disease 2019 (COVID-19) pandemic. Design/methodology/approach: The current study was undertaken in 2019, the year before COVID-19, and 2020, the year of COVID-19's major impact. This study utilizes the Value-Added Intellectual Coefficient (VAIC) as a measure of efficient use of IC. Financial data were collected from 163 hotels in Serbia. Structural equation modeling (SEM) was used to test the proposed hypotheses. Findings: The results revealed that IC was a relevant factor for both profitability and employee performance before and during the COVID-19. However, the study reveals a negative moderating effect of tangible capital efficiency (TCE), meaning that with the increase of TCE, the relationship between IC and performance becomes weaker. Research limitations/implications: The main limitation of the study is rooted in VAIC's ability to fully incorporate all elements of IC, leaving the relational capital out. Practical implications: To achieve better performance, hotel management should direct resources more towards IC and less toward tangible assets, which implies doing more with less. Originality/value: The results indicate the importance of IC in a period of crisis for the industry and economy that are not recognized as knowledge intensive. To the best of the authors' knowledge, no other study has attempted to assess the relative contribution of tangible assets and IC before and during the COVID-19 pandemic.