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Financial bankruptcy is inevitable in the tourism and hospitality ecosystem. Despite the pertinence of tourism and hospitality businesses going into bankruptcy, limited studies have investigated the early warning signs and likelihood of a financial bankruptcy occurring in tourism and hospitality firms. This study examined the predictive value of financial ratios as potential indicators in predicting bankruptcy among tourism and hospitality firms.

Altman's z-score bankruptcy prediction model was applied through five key financial ratios to predict bankruptcy of the Thomas Cook Travel Group over a ten year period (2008–2018).

The key findings of this study strongly suggest that besides the size and location of the firm, financial ratios are reliable predictors and play a pivotal role in predicting the bankruptcy of a tourism and hospitality business.

The paper provides key stakeholders to adopt checks and balances to identify financial distressed tourism firms through financial ratios.

This is the first academic paper to inspect the financial history of Thomas Cook Travel Group in a financial ratio context, particularly following the bankruptcy of the firm in 2019.