The Role of Human Resources in the Financial Performance of the Lodging Industry: Evidence Based on Financial Accounting Numbers in Korea

Abstract

Purpose - This study investigates the role of human resource investment in the tourist accommodation sector of Korea. Specifically, it aims to explore the impact of human resource investment, particularly through employee education and training, on both the short-term and long-term financial performance within the Korean lodging industry. Design/Methodology/Approach - Utilizing data f rom private firms for 2011-2020, the study examines how financial performance, including sales growth, is related to expenditures on education, training, and benefits as proxies for human resource investment. The research primarily employs a series of multivariate regression analyses. Findings - The findings reveal that human resource investment itself does not affect short-term financial performance, but complements and supports financial outcomes of capital expenditure (PPE investment). However, the sales-based performance attributable to human resource investment becomes apparent within two years, and the supporting effect on financial performance generated due to capital expenditure still holds. Additionally, these results are significant for large-sized firms, but not for those small. Research Implications - Overall, human resource i nvestment plays a critical role i n fi rm performance by serving as a key factor in managing company resources efficiently. This study highlights the need for the simultaneous periodic management of capital- and human resources. Furthermore, this study sheds light on the role of human resource investment in the lodging industry by providing empirical results based on financial accounting numbers, an aspect that has not previously been extensively considered.