The Effect of Risk Management on the Financial Performances Among Hospitality and Tourism Companies in Malaysia

—This study explored the effect of risk management on the financial performance of Malaysian hospitality and tourism companies. The risk management as it pertains to this study focused on four major risks which is operational risk, liquidity risk, market risk and credit risk. The control variables used in this study is company size. The agency theory and extreme value theory (EVT) were explained broad in the theory development. Quantitative research approach was used in the study in order to generalize the effects of risk management on the financial performance of the hospitality and tourism industry. Descriptive research design was used to examine the research problem. This study uses secondary data obtained indirectly through internet intermediaries as a means of collecting secondary data. The study population is the public listed companies in Bursa Malaysia. The unit of analysis of this study is the Travel, Leisure & Hospitality Companies listed in Bursa Malaysia. The sample selection is performed with a purposive sampling technique based on a non-probability sampling method. With the purposive sampling method, 29 companies were selected which are suitable for the objective of this study. The secondary data used in this study were derived from the audited financial statements and annual reports of the Travel, Leisure & Hospitality sub-sector of consumer, product, and services of Bursa Malaysia from 2012 until 2021. Panel data analysis and regression analysis were employed to analysed the collected data using SPSS version 22. The data was then analysed to generate descriptive analyses, correlation analyses, and regression analyses. As a result of the study, it was found that credit risk, liquidity risk, operational risk, and market risk are statistically negatively related to the financial performance of the Hospitality and tourism industry in Malaysia. In contrast, the size of the bank is positively correlated with the financial performance of the hospitality and tourism industry in Malaysia. From the findings it was revealed not all the hypothesis were accepted except for company size