Risk preparedness strategies in European tourism firms: a textual analysis of risk disclosures with machine-learning

Tourism firms are exposed to numerous risks, but our knowledge on how these firms are prepared for risk remains limited, which is a relevant gap in the existing risk-management-oriented studies in the tourism sector. This paper aims to add to this gap by exploring the existence of risk preparedness in European tourism firms, based on risk disclosures placed in annual statements. We employ machine learning to perform topic modelling and apply illustrative approaches while exploring tourism firms’ risk disclosures and narrations. The findings indicate a lack of disclosure regarding risk preparedness methods, despite visible discussions about risk exposures and some signs of board risk oversight. This research highlights the need to enhance communication and implement risk-preparedness strategies across European tourism firms. It provides significant insights for academics, practitioners and policymakers who aim to strengthen the industry's ability to withstand the negative impacts of risk while building risk resilience.