Question

movement restrictions imposed by various governments to mitigate the spread of covid 19 pandemic in the form of social distancing organisations to a standstill, leading to the decline in growth and market share, especially the hard hit tourism and hospitality industries. assume that you are the manager of IDISAM hotel ltd, which holds the largest m,arket share in the hospitality industry, but now on the verge of collapsing due to covid 19 pandemic. required; supporting your answers with specfic example and justifications, propose corporate or grand strategies that the company can use to deal with the situation at hand.

Answer 1

Tourism

The tourism economy has been heavily hit by the coronavirus (COVID-19) pandemic, and measures introduced to contain its spread. Depending on the duration of the crisis, revised scenarios indicate that the potential shock could range between a 60-80% decline in the international tourism economy in 2020. Beyond immediate measures to support the tourism sector, countries are also shifting to develop recovery measures. These include considerations on lifting travel restrictions, restoring traveller confidence and rethinking the tourism sector for the future.

Key messages: responding to the impact of coronavirus (COVID-19) on the tourism economy

The coronavirus (COVID-19) pandemic has triggered an unprecedented crisis in the tourism economy, given the immediate and immense shock to the sector. Revised OECD estimates on the COVID-19 impact point to 60% decline in international tourism in 2020. This could rise to 80% if recovery is delayed until December. International tourism within specific geographic-regions (e.g. in the European Union) is expected to rebound first.

Domestic tourism, which accounts for around 75% of the tourism economy in OECD countries, is expected to recover more quickly. It offers the main chance for driving recovery, particularly in countries, regions and cities where the sector supports many jobs and businesses.

The impact of the crisis is being felt throughout the entire tourism ecosystem, and reopening and rebuilding destinations will require a joined up approach. Tourism businesses and workers are benefiting from economy-wide stimulus packages, with many governments also introducing tourism specific measures. Governments and industry are focusing their efforts on:

• Lifting travel restrictions and working with businesses to access liquidity supports, apply new health protocols for safe travel, and help to diversify their markets.

• Restoring traveller confidence and stimulating demand with new safe and clean labels for the sector, information apps for visitors and domestic tourism promotion campaigns.

• Preparing comprehensive tourism recovery plans, to rebuild destinations, encourage innovation and investment, and rethink the tourism sector.

These actions are essential, but to reopen the tourism economy successfully and get businesses up and running, more needs to be done in a coordinated way as tourism services are very interdependent. The travel and tourism industry and governments should continue to reinforce their coordination mechanisms to accompany the businesses, notably the smallest ones, and the workers. Particular attention should be given also to the most sensitive/vulnerable destinations in the recovery phase.

Looking ahead, the measures put in place today will shape tourism of tomorrow. Governments need to already consider the longer term implications of the crisis, while staying ahead of the digital curve, supporting the low carbon transition, and promoting the structural transformation needed to build a stronger, more sustainable and resilient tourism economy. The crisis is an opportunity to rethink tourism for the future.