The Effects Of COVID-19 On Travel And Hospitality Industry

Introduction. Industry Overview. Literature review. General impact on Travel & Tourism sector. Impact on the Hospitality industry. Findings and further business opportunities. Conclusions. References. Appendices.

This paper analyzes the impact of the Covid-19 virus, which led to the financial crisis worldwide in the Travel & Tourism sector and related hospitality sector. In a number of countries, Tourism accounts for a large part of their economy, for some of them even the main part. In the current situation, it means that those countries will suffer the most. The most sensitive region that is expected to suffer the most from the crisis is the Asia Pacific region and Europe. Generally, it is predicted 2.1 trillion in revenue loss in this sector and around 75 million jobs. Moreover, the aviation industry has never experienced such a severe loss, layoffs rates, and bankruptcies. It is predicted that it will take from 3 to 5 years to recover to the aviation industry. The biggest problem for most of the airlines is that they have cash only that can cover less than 3 months of expenses. The hospitality sector, which is closely linked to aviation, is experiencing the same disastrous situation, which is even worse than during previous world crises and pandemics. The rate of layoffs in the hotel industry reaches 70%. Especially, upper class and luxury sector hotels are facing difficulties the most. Businesses in this industry should transform their business model and try to find other business opportunities in this sector. It is highly possible that this crisis will change consumer's habits and travel & tourism will be transformed into sustainable tourism. For instance, Airbus is considering facilitating the production of reduced carbon emission planes. This paper will examine the situation in depth providing real figures and data.

The travel industry is concerned to be one of the largest service industries in the world, which was particularly facing a great increase every year. The travel industry is focused on providing clients with numerous services that are necessary when moving from one country to another. It is similar to the tourism industry but is broader since the travel purpose is not solely tourism. (Revfine, 2020) This industry includes services that are directly related to travel, such as transportation, but also include services related to accommodation and catering, meaning that this sector is closely linked to the hospitality industry. Due to the current world situation with Covid-19, a lot of business industries are affected and are facing a disastrous loss furthermore travel industry is not an exception. This made me interested, how hard this sector is affected and how long will it take to recover. Consequently, this paper will discuss the consequences of the world crisis, caused by Covid-19 on the travel and hospitality industry, and are there any opportunities for businesses in this sphere further on.