Short-term debt and long-term debt determinants in small and medium-sized hospitality firms

In this article, based on a sample of 177 hotel small and medium-sized enterprises (SMEs) for the period 2004–2012, our objective is to test the applicability of trade-off theory and pecking order theory (POT) to the capital structure decisions of hotel SMEs, focusing on analysis of short-term and long-term debt. The multiple empirical evidence obtained here allows us to conclude that the applicability of trade-off theory to hotel SMEs’ capital structure decisions is much greater in relation to long-term debt than short-term debt and, on the contrary, the applicability of POT is much greater in relation to short-term debt than long-term debt. The empirical evidence obtained allows us to make suggestions for the owners/managers of hotel SMEs.