Has COVID-19 changed the travel & tourism stock market behavior in the USA?: Case of Dow Jones U.S. Travel & Tourism and S&P 500 indexes

Tourism, a vital sector for many countries, faced unique challenges during the COVID-19 pandemic. The industry was profoundly affected as lockdowns halted the operations of key tourism components such as hotels, restaurants, airlines, and travel agencies. These issues led to significant costs associated with sanitation and safety protocols, which further strained the financial health of tourism businesses and impacted the market capitalization of publicly traded companies in this sector. This study aims to investigate the fluctuations in the market valuations of tourism companies in comparison to those within broader market indices before, during, and after the COVID-19 pandemic. It seeks to address key questions such as: Did the market valuations of tourism companies follow similar or divergent trends compared to companies in broader market indices during these periods? Were there observable changes in the stock price behaviors of tourism-related firms in relation to companies in the wider economy during the pandemic? Additionally, did the relationship between the travel industry index and the broader market return to its pre-pandemic state after the pandemic subsided? The primary objective of this research is to uncover the unique dynamics of the tourism sector within the context of financial markets. It holds practical relevance, especially for investors looking to enhance their portfolio diversification through investments in tourism-related stocks. This study also lays the groundwork for more in-depth research on the tourism industry and its interconnectedness with the broader economy. By examining the complexities of this sector, the research aims to provide insights that can inform investment decisions and policy-making in the financial domain.