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.
Patel et al. (Thu,) studied this question.