Question

Write a research proposal on the topic effects of the corona virus pandemic on employment and output on the hospitality industry - accomodation and food services, the proposal is to be 20 to 30 pages

Answer 1

EFFECT OF CORONA VIRUS:

ON EMPLOYMENT:

The sudden emergence of the COVID-19 pandemic is dealing a severe blow to state economies, businesses and workers. These unprecedented challenges are having economic ripple effects across the country as thousands of people unexpectedly find themsleves out of work with the potential for significant increases in unemployment.

The preliminary results showed that loss of employment was considered as the most severe immediate impact of the crisis while lower economic growth and rise in inequality were probable long-term impact. As per the survey, the immediate policy priorities suggested were protection of workers and families, short-term employment creation and income transfers to affected workers. Nearly 17 million people filed initial claims for unemployment insurance over the past 5-6 months, suggesting that the unemployment rate is already above 15 percent well above the rate at the height of the Great Recession. Estimates of job loss showed that 80 per cent jobs were affected in urban economy, most of which were self-employed, 54 per cent jobs were affected in rural economy, most of which were casual employment.

Some immediate issues on the minds of policymakers include expanding paid leave for workers, preparing state unemployment insurance benefit programs for surges in demand and helping businesses transition to full-time teleworking.

In September 2020, India saw an unemployment rate of over six percent. This was a significant improvement from the previous months. A damaging impact on an economy as large as India’s caused due a total lockdown was imminent. Unemployment went up to 24 percent on May 17, 2020. This was possibly a result of a decrease in demand as well as the disruption of workforce faced by companies. Furthermore, this caused a GVA loss of more than nine percent for the Indian economy that month.

OUTPUT ON HOSPITAL INDUSTRY:

Rs 25,090, Rs 53,090

Rs 75,590, Rs 5,00,000

Rs 6,00,000, Rs 12,00,000

These are not random numbers. These are the per day costs and cumulative two-week costs for a bed in private hospitals in Delhi if a person gets infected by Coronavirus. Add to this the price of personal protection equipment, RT-PCR tests, and medicines. The cumulative bill is more than what at least 94% of the people in the country earn in a year.

In the time of the Covid-19 pandemic, it is pertinent to remember that right to life enshrined in Article 21 of the Constitution includes the protection of health and access to health care, which cannot be denied on financial grounds.

The COVID-19, the infectious disease is still spreading and as per WHO figures, nearly 62 lakh were already infected with the fatality of about 6 per cent as nearly 3.7 lakh people have lost their lives worldwide till now. The impact can be clearly seen not only on the lives of the people but even on the economic fabric of the nations. Both, the lives and livelihood are at stake as the authorities are in a fix whether to open up the economy or save lives.

The cost of treatment due to COVID-19 in a hospital could vary a lot depending on the city one resides in, the kind of hospital one chooses, the number of days of stay, usage of ventilator and occupancy of ICU. Depending on the tests reports, completion of monitoring and isolation period, the stay can be as long as 14 days or even more and the hospital bill could go up to Rs 5 lakh or even more.

According to a recent report, medical inflation is close to three times of general inflation and similar trend is prevalent in India too. WHO advises that all confirmed cases, even mild cases, should be isolated in health facilities, to prevent transmission and provide adequate care.

In a pandemic, the government should be able to ensure that every person who requires medical care be provided that care irrespective of their ability to pay.

“If her treatment is incumbent upon her ability to pay, how are you going to check the transmission from stopping? It is a house of contradictions. This is criminal governance on display in the worst form,”

EFFECT ON ACCOMODATION:

COVID-19 has affected every sector across the globe, and the hotel industry is among the hardest hit. Our research suggests that recovery to pre-COVID-19 levels could take until 2023—or later. Investors are providing similar views of hotel companies’ prospects, as seen in the underperformance of US lodging real estate investment trusts (REITs). Like so many industries, hospitality will also see both subtle and substantial shifts in the post-pandemic era. Some are already apparent today.

On the hotel front, we analyzed the long-term historical relationship between industry performance and economic data. There is variation across chain scales (from luxury to economy), but we found the strongest relationship between changes in revenue per available room (RevPAR) and the unemployment rate. Based on this relationship, we used the unemployment rate projections from our colleagues to set a baseline for hotel performance. We then adjusted the baseline to account for additional impacts of COVID-19, factoring in the likely length of shelter-in-place restrictions, changes in company travel policies, consumer sentiment and willingness to travel, and structural changes to demand, such as videoconferences instead of in-person events.

Some Chinese hotels are fine-tuning their booking tools to remind customers about the restrictions in place, and hotels follow up with guests about those before they arrive. Upon check-in, some hotels require guests to provide proof (via a QR code) that they have not been in contact with infected people. Some also measure guests’ body temperature several times: at check-in, anytime they enter and exit the hotel during their stay, as well as upon their checkout. For Western hotels to adopt the same standards would of course require changes in government policy and public-health approaches.

FOOD SERVICES:

The COVID-19 pandemic affects the global food industry as governments close down restaurants and bars to slow the spread of the virus. Across the world, restaurants' daily traffic dropped precipitously compared to the same period in 2019. Closures of restaurants caused a ripple effect among related industries such as food production, liquor, wine, and beer production, food and beverage shipping, fishing, and farming.

In-restaurant dining is also seeing a big impact in the past few days, reporting an approximate business drop of 30-35 per cent, with the restaurants located within mall premises recording a sharper drop, it added.

Consumer Products food & beverage companies are facing significantly reduced consumption as well as disrupted supply chains. At-home consumption has increased, but out-of-home consumption – which historically generates the highest margin – has come to nearly a standstill. There may be long-term changes in customer behavior and demand.

Restaurants and foodservice businesses were some of the first economic activities severely impacted by the COVID-19 pandemic. Dining in restaurants virtually stopped overnight in cities and states as social distancing guidelines took effect. A Penn State research team has been working to develop rapid response strategies for the industry, from the perspectives of both business owners/managers and consumers. Solutions will need to address both aspects of this equation.

COVID-19 had clearly hit the food service sector hard, and there are likely to be more casualties before we return to some kind of normality. However, with the lockdown soon to be relaxed operators must be thinking about how to re-emerge and adapt to the ‘new normal’. There is pent up demand for coffee shops, restaurants, and pubs to reopen, however footfall will be lower than pre-COVID, meaning businesses need to act now in order to survive.