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COVID-19: “Understanding the Impacts of Pandemic in Tourism and Hospitality Industry

Updated: May 9, 2020

By: Leandro Y Paralisan | LEAPS Academy Philippines

For: HICM 2020 - Hotel Incident Consequence Management


COVID-19 which now carries a deadly reputation as a pandemic has vastly impacted global industries bringing down every nations' GDP to a devastating level. As we foresee a greater impact on tourism as an industry, it is likely expected that a sizeable destruction will take its course on business owners, tourism investors, and hotel and resort owners.

COVID-19 as a worldwide crisis has caught humanity off-guarded with its current global death toll of over two hundred fifty thousand and has heavily affected the hospitality and tourism industry far greater than it experienced in 9/11 attack, 2014 outbreak of EVD (Ebola Virus Disease), SARS (Severe Acute Respiratory Syndrome, 2000) and the economic down turn of 2009.

Humans as Central Figure of this Crisis

COVID-19 placed people as the central figure of this crisis inflicting absolute trepidation, panic and in a despairing vehemence in overcoming such degree of emotional agony that we never experienced before. The virus peculiar characteristic is the need of a human host for it to survive. For humans to live, without conditions must practice safe distancing even to closest family members which is perceived to be a painful scene. A question lies - How would this be in tourism and hospitality environment? How should industry professionals respond as set forth in the universal principles of guest service?

Impacts of Pandemic to International Tourism

The impact level of COVID-19 has far out-stretched all industry efforts to recover its loss at these current times when hospitality and tourism is taking an enormous beating. An impact assessment from the World Tourism Organization, (UNWTO) on March 2020 estimates that tourist arrivals could decline by 20% - 30% in 2020 and this would translate into a loss of 300 to 450 billion dollars in international tourism receipts predominantly close to one third of the USD 1.5 trillion generated globally in the worst-case scenario. These estimates emanated from what the industry went through with various historical pandemic episodes - SARS, EVD and the 2009 global economic crisis as existing references. It can be further gleaned from tourism studies that the industry generates impeccable effect on gross domestic product and the employment arena. After the global economic crisis in 2009, employment in all sectors grew by 11% between 2010 and 2018 while employment in the accommodation and food and beverage grew by 35%. In this current battle with COVID-19, the impact remains to be seen.

Potential Risks and Vulnerabilities Dependent per Property

While this event generally impacted tourism and hospitality industries, the economic regression on individual properties mainly depends on the type and characteristic of that property, market, type of services and geographical location. Studies conducted by Hotel Management published on its April 15 2020 issue revealed that hotel properties vulnerable to performance and decline values are among others, full service hotels that are dependent on group businesses, gateway markets that depend on international travel, fly to markets dependent on air travel, airport markets and markets influenced by the energy sector. Less affected or less vulnerable properties are hotels that primarily rely on transient segments, drive to markets which can be expected to recover faster than those dependent on air travel, suburban small metro hotels, extended stay hotels, properties that stand with an affiliated brands, drive to hotels and resorts, economy and mid-scale properties.

Resiliency of Tourism and Hospitality Players

Tourism by nature is self-resilient. On the same lengths, hospitality by nature speaks more of the services unique to a particular brand it offers. In the midst of this pandemic, industry players are seen collaborating with the government by offering food and shelter for frontliners albeit balance of health issues and the risk of contagion were needed. The “spirit of bayanihan” prevails more than the larger concerns of hotels currently facing. Some hotels quickly offered services while on lockdown, primarily as billeting sites for employees in the financial sector, business process outsource entities and companies that require feasible stay at home-like-facilities for their associates. Other are able to effectively capitalize on e-markets, take-order apps and mobile food deliveries while leveraging on the continued promotion and up-selling of food and beverage products on-line. Hoteliers and tourism industry players are up to their toes in becoming resilient through this crisis as they strive to navigate fairly along the impacts of hotel closings and much anticipated re-openings.

The Changing Customary Perspective of Business Owners

Way decades past, the ultimate challenge of corporate security and tourism security practitioners was how to increase the attention of business owners, investors, corporate executives and decision makers towards security, loss prevention and safety. From an old mind set, organizations had been in a consistent belief in an old paradigm that their security units are simply an “expense department” and this negates any significant value towards the over-all success of the organization. A wrongful perception that most if not all security professionals had to deal with alongside business owners that severely prevents the growth of the organization at its security face value. As we all felt the adverse effects of this pandemic, our dark experiences may somehow shift business owners’ customary perception into a more pragmatic standpoint as we engage into the new norms at the point when business and industries re-emerge and regain their losses. By the time hotels and accommodation establishments decide or allowed back to the game and re-open, these experiences may now push business owners to find time, listen and pay preferential attention to those eventually responsible in operationalizing the “new norms” in this part of the industry. One thing more is certain though –operationalizing these new norms shall come with high priced premiums that will necessitate a considerable amount of investment.

Look forward to the next series:

“Operationalizing the New Norms in the Hospitality Industry”

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