Question

What is the impact that the COVID-19 pandemic has had on the Tourism and Hospitality Industry Worldwide?

Answer 1

The tourism industry has always been one of pandemics and crises hit industries hardest. The industry has borne the brunt of major pandemics and plagues throughout history, in particular the Black Death (1346-1353), Spanish Flu (1918-1920), SARS (2002-2004), H1N1 Swine Flu (2009-2010) and Ebola Virus (2014-2016). For example, the Spanish flu limited travel for four months and killed 21 million people in that short period. Additionally, the swine flu pandemic led to the loss of nearly a million overseas tourists in the Mexican tourism industry alone over a five-month span which resulted in losses of around US$ 2.8 billion.

Undeniably, COVID-19 makes hotels one of the hardest-hit sectors. Due to major cancelations of flights, tours, conferences, hotel reservations and a subsequent downturn in incoming travel, hotel occupancy rates and average room rates have fallen sharply causing unprecedented declines in profit margins. In Italy, 90% and 80% of all hotel reservations in Rome and Sicily have been cancelled and, for a relatively small tourist destination such as Ghana, hotel occupancy rates are down from 70% to below 30%, with some hotels reporting as low as 5%

Although hotels experience substantial losses in revenue, there is a need to make utilities, wages and salaries as well as other recurring expenses and statutory payments. The hotel industry is heading for an unparalleled COVID-19 recession, by all intents and purposes. The pandemic will live on for about two years, according to scientists. Nevertheless, even after the pandemic subsides, the fear of traveling and implementing social distance protocols does not go away.COVID-19 will leave the hotel industry severely weakened and it is widely accepted that the business will not be the same even after the lifting of the lockdowns and travel restrictions.

Each hotel has suffered from the COVID-19 pandemic. In order to cope with the pandemic, hotels need to coordinate their efforts and embark on common programs which will help all hotels in a destination. The association of hotels at the destination will unify its members' efforts to find a common solution to this issue. The association of hotels is in a stronger position to discuss stimulus packages such as tax cuts with government and the national tourism authority that will help reduce the pressure on the members. Members may also provide technical and financial assistance from otel associations.

Since travel has become an integral part of everybody's life and is no longer seen as a privilege but a necessity to break away from a boring routine and rejuvenate, we are optimistic that travel will revive soon. However, there will be a dramatic change in the marketing services to destinations. The typically exotic destinations that have seen a managed exposure to the pandemic may for the time being see an upward trend in tourism or as an alternative destination for some of the traditional ones.Luxury travel will take time to play an significant role in an individual's life and home market and self-driven accommodation in luxury hotels and home stays will be the priority until next summers as social isolation and living in smaller properties will minimize the risk of the virus. As they have close proximity and fewer Covid-19 cases, South East Asia and Middle East will play a key role in Indian Outbound Tourism.

In times of pandemics and crisis, the tourism industry has always proven to be resilient, and post-COVID-19 is expected to be no different though the road to recovery might be long. With the coronavirus outbreak and consequent effects on hotels, we can only say the industry is down but not out. Hotel managers need to set up a crisis management strategy based on the above-mentioned COVID model to ensure that they keep their heads above water.