During a recession, lower profitability limits investments in new initiatives; significant cost‐cutting could deteriorate service levels; and sticky tangible and intangible resources limit a hospitality establishment's ability to reduce its asset base. Limited ability to cut costs or reduce asset base shifts the focus on improving efficiency. Drawing on panel data of 1,647 Portuguese hospitality establishments from 2007 to 2014, we find that an increase in the return on fixed assets made the highest contribution to operating profit, followed by an increase in the return on intangible assets. Increasing labour productivity had the lowest effect on operating profit.