Impact of COVID-19 on the Hospitality Industry

The hospitality industry is one of the economy’s leading sectors that offers customers services. The industry depends mainly on tourism and visitation, and the sudden outbreak of COVID-19 posed a detrimental effect on the hospitality industry. This paper will highlight the impact of the COVID-19 pandemic on hotels, restaurants, bars, and events and how this impact can affect the future of these business operations.

Impact of COVID-19 on Hotels

The COVID-19 pandemic has impacted hotel companies directly, and the effect has lasted for quite a long time as the companies are still working towards regaining their financial status. This effect has led to low-income revenue and a decreased profit margin in the hotel business. Governments enacted COVID-19 measures, regulations, and codes of conduct on the hospitality industry negatively impacted their business operation. These measures include; an increased sense of hygiene, sanitation, social distancing, and other health measures for better crisis preparedness in the public sector to combat the spread of the virus.

In the wake of the COVID-19 pandemic, travel restrictions at national and international levels, the traveling bans enacted, such as border, and airline closures, international summit cancellations, quarantine, and fear of contracting the virus, posed a severe impact on the hospitality sector. International travel regulations put by governments and humanitarian organizations prominently reduced the desire for leisure travel and the search for hotel destinations. As a result, the hospitality industry generated low incomes and ran bankrupt because people’s fears of traveling and getaways were high. Hotels were getting very little reservation during the pandemic compared to the previous years when the industry was booming and looting hefty profits from their operations. The profit margin for big hotel chains like Hilton and Marriot recorded a low-profit margin over the pandemic and past pandemic periods.

During the pandemic, visitation and leisure travel declined, and travel bans and restrictions put by the Government caused a lot of fear and anxiety; hence people could not travel as much as before. The hospitality industry contributes to the global GDP, so any decline in the sector will directly affect the GDP globally and the business operations, whether small-scale, medium, or large-scale. The pandemic has impacted many businesses related to hospitality. Consequentially, the businesses, service industry, and production sector were threatened by the changed consumer habits due to government regulatory measures resulting in significant losses. Hilton said it suspended operations at 275 properties, mainly in the United States and Europe, during the first quarter due to the pandemic, compared with about 730 properties a year earlier, resulting in losses in the company’s revenues and profit margins.

The issue of hygiene and sanitation in the hospitality industry puts much strain on the resources in the sector. Upcoming hotels that were not financially established to cope with the situation ran out of financial resources and eventually closed their business operations because the pressure to cope was overwhelming (Duarte, Paulo, et al. 1-14). Effective management and requirements such as wearing face masks, temperature recording, maintaining social distancing, and frequent sanitization was costly for the business. Hospitality management, key stakeholders, and decision-makers had a hard time contemplating the issue of vaccination for both employees and hotel visitors, and tourists. International hotels like Hilton and Marriott were hit hard, and the impact was not lesser in domestic hotels, tourism and leisure activities dropped significantly, resulting in meager revenues and income such that it was not sustainable for the businesses. In Europe, most of the hotel profit margins went very low during the pandemic, and operations did not get much better after businesses had resumed as per the government directives (Sukhdev et al .23).

Impact of COVID-19 on Restaurants

Restaurant business flourishes when tourism and leisure traveling is booming, pre-COVID-19, the hospitality industry was thriving well because there were no travel restrictions and social gathering restrictions. During the pandemic, many restaurant businesses recorded low revenue and profit margin due to travel restrictions, decreased leisure activities, and when the social gathering was prohibited. Many people were not going out for social events such as dates, birthdays, and dinners as before. Most restaurants that did not meet the required standards put across by the health sectors and Government were shut down (Spiegel et al. 17.2), thus recording high losses and low-profit margins during that period. Low income