Impact of Covid19 on Hospitality Industry: A Study on Tourism Sector of UK

This report analyzes the impact of Covid19 on the hospitality industry, specifically on the tourism sector of UK. It covers the economic contribution of this sector in UK and the measures taken by the government to support the businesses. The report also suggests recommendations for the industry to recover from the losses.

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Table of Contents
INTRODUCTION ......................................................................................................................4
TASK ..........................................................................................................................................4
CONCLUSION ...........................................................................................................................7
REFERENCES............................................................................................................................8

INTRODUCTION
The hospitality industry is one of the major contributor of national income of any
economy. It includes tourism agencies, hotels, restaurants, casinos and outdoor catering etc.
Tourism sector specially is one of the most profitable sector in UK as it brings foreign capital
and contributes to national income. Arrival of tourists from various countries also help in
increasing the GDP of the country. But in 2020-2021,the worldwide Pandemic Covid19 has
impacted all the industries including tourism industry in UK in a major way in respect of
foreign earnings, consumer investment, loss of employment etc. (Milaković and, 2022). Due
to the lock down restrictions imposed by the government, tourism sector in UK faced a big
shortfall in the turnover causing some clubs to shut their business that resulted in decline in
Gross value added to the economy of UK. The following report will cover the impact of
covid19 on hospitality industry , mainly on tourism sector of UK and on the economic
contribution of this sector in UK.
TASK
Covid19 has affected the tourism sector of all economies in a major way in terms of
profitability with the effect on the economy of UK as well and even more after Brexit. The
hospitality sector (i.e. food and tourism) is the most affected sector by the pandemic as these
sectors require more hygienic conditions at all places such as dinings, clubs, wash rooms etc.
due to the public gathering at tourist places and in restaurants etc. that require norms of social
distancing to be followed, expenses on more sanitization, public safety etc. (Ali and Ali,
2022). Due to this epidemic, the clubs, bars and restaurants had to expend more on public
safety as they deal in eatable products that require more safety to avoid any infection of this
disease i.e. corona virus. So, the hospitality industry had to consider the Social distancing
norms and follow the lock-down restrictions made by the respective governments to avoid
shutting down of the business in case of any violation of the norms regarding covid19 (Kang
and Yang, 2022). As, it caused much loss of revenue and employment in tourism sector that
led the businesses to shut down their businesses and consequently the economy of all the
countries got affected. Taking the economy of UK, it had also suffered due to less contribution
from the hospitality sector because of the low generation of revenues as government imposed
bans on the inter state travel of people to prevent the spread of Covid19. The tourists from
other countries were also not allowed to visit in other countries as international flights were

also banned to prevent the transmission of disease. So, the revenue from travel and tourism
got affected due the decline in number of tourists from various countries that bring foreign
currency and contribute to the economy of UK. In these industries, the people of age group
of 16-24 were unemployed due to fall in operations of travel so as to follow the lock down
restrictions. The turnover from tourism operations also fell down during the first national
lock-down, but it got a rise after some lock-down restrictions were released later in 2020
(Oxford Analytica, 2022). But still it has not reached the pre pandemic level of turnover that
was in 2019. Instead, due to the increase in the number of corona cases again, there is a slight
surge in job vacancies. Not only international flights were banned, but there were more
restrictions on international trade as well. The hospitality industries in UK had stopped the
trade operations for some period due to the fear of extreme losses they faced in the first phase
of lock-down.
To support the hospitality industry for covering the losses that they faced during lock
downs, the UK Government offered help to support their businesses by launching various
schemes such as Corona Virus Job Retention Scheme to promote employment, sanction of
business loans to further start the trade operations that were temporarily stopped due to lock
downs, and a special scheme for restaurants under hospitality sector i.e. Eat Out to Help Out
Scheme and other various schemes such as providing grants to the business and relaxation in
VAT rates and other tax relaxations. The government offered these schemes so as to cope up
with the restrictions they faced. According to the civil aviation industry, the domestic flights
restrictions were also imposed with ban on international flights due to hike in the covid19
cases in August 2021 but later after the situation came under control, there was a lift up in the
restrictions of both domestic and international flights. Travel and Tourism industry
contributes nearly 9%-10% of UK economy. UK is 10th biggest tourism destination in the
world. It was estimated as one of the fastest growing sectors in UK but due to ban on flights,
restrictions in trade operations and lock downs, it got hindered due to the job losses of more
than 2 million (Salisu, Adediran and Gupta, 2022). The hotel industry has been affected hard
by the corona outbreak. For Example, Hilton hotels, a tourism business in UK had hard
business operations in 2020, but after the vaccine procedure started, its travel officials
observed a big surge in the bookings since the first lock down. To prevent the infections of
Covid19 in the company, it launched a new hygienic and customer service program for official

gatherings & events and promoted virtual attendance. It gives priority to safety of the
customers and staff with maintaining its liquidity position as well. It faced reduction in the
occupancy of its rooms and thereby in revenues because of the restrictions on travel and
tourism globally. In the year 2020, many tourism businesses had to face loss of annual revenue
because of the new regulation of the government that stated a 14 days isolation period as
quarantine for the tourists arriving in UK to avoid the spread of covid19. The various
promotional activities for the advertisement of travel industries were also banned to avoid
public gatherings. Due to lock down, the local amusement parks were also closed.
Due to UK's high Covid death rate per million of population , the tourist destinations
in UK are considered highly unsafe by the tourists and they do not like to visit their for
tourism purpose to avoid any infection from Covid. It is affecting worstly the image
hospitality industry in UK. The hospitality industry is recommend to amend their venues to
maintain hygienic conditions at all its staff meetings and follow safety norms for customers
as well (Rammal and et. al., 2022). It is challenging to the Tourism sector to implement all the
social distancing and public safety norms in a long term. The hotels in UK are increasing the
number of rooms and accommodations in the form of hostels so as not to be shared by the
guest tourists. This is being done in order to avoid any infection and for the safety of the
tourists. Further , due to the heavy losses in Travel and Tourism industry by the pandemic, it is
being estimated that the number of travels will not reach the levels that were before the
happening of pandemic. But there had been rise in the number of visits in 2021 as
compared to the travels in 2020 because of the ease of some restrictions in 2021 but is still
less than the travel levels of 2019 i.e. pre pandemic. Companies have to incur Extra costs for
implementing all the precautionary measures. Some of the restaurants in UK are facing low
profitability due to the problems of seating arrangements and reduction in capacity. It is
recommended to the hospitality industry to take advantage of this crisis by innovation of new
productivity measures to promote the growth of tourism sector. Further, they should make
the process of visas application convenient and accessible for the travellers. The UK
government should also innovate new ideas to boost the UK Tourism by handling the
pandemic more effectively. It should ensure safe travel for the tourists. The government has
formed a report on Global Travel taskforce that states the significance of tourism in UK. It
also initiated an overseas marketing campaign for the promotion of UK's Tourist destination

to attract tourists from overseas by ensuring UK tourism as a safe place with safe travelling
(Torkkeli, Faroque and Velt, 2022).
CONCLUSION
From the above discussion, it has been concluded that the hospitality sector has suffered a lot
due to the Covid19 pandemic in terms of their trade operations and profitability. So to recover
the losses, it is recommended to this industry to take up the advantage of the schemes
introduced by the government to restart the businesses and diversify it to attract more visitors.
These sectors should make their holiday destinations attractive in order to attract more visitors
to earn foreign currency. The restaurants should be made hygienic by more safety
arrangements at dining, eatables and other equipments used by the outsiders. They should not
let the visitors enter without masks and prescribed medical reports. They must ensure that the
staff there is fully vaccinated. It is recommended to reinvest in the tourism industry to be back
to the normal position. The travel and visas application process should be made accessible by
the tourists for increasing the number of visits in tourist destinations of UK.

REFERENCES
Books and Journals
Ali, L. and Ali, F., 2022. Perceived risks related to unconventional restaurants: A perspective
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Kang, Y. and Yang, K.C., 2022. Framing Digital Reality Technology Applications Among
Museums During COVID-19 Pandemic: A Comparative Text Mining Research.
In Extended Reality Usage During COVID 19 Pandemic (pp. 109-125). Springer,
Cham.
Milaković, I.K. and Miocevic, D., 2022. Consumer's transition to online clothing buying
during the COVID-19 pandemic: exploration through protection motivation theory
and consumer well-being. Journal of Fashion Marketing and Management: An
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Oxford Analytica, 2022. Patchwork of COVID-19 certificates to impede travel. Emerald
Expert Briefings, (oxan-db).
Rammal, H.G and et. al., 2022. Economic nationalism and internationalization of services:
Review and research agenda. Journal of World Business, 57(3).p.101314.
Salisu, A.A., Adediran, I.A. and Gupta, R., 2022. A note on the COVID-19 shock and real
GDP in emerging economies. Emerging Markets Finance and Trade, 58(1).pp.93-
101.
Torkkeli, L., Faroque, A. and Velt, H., 2022. The Future of International Entrepreneurship
Post-COVID-19. In Socioeconomic Dynamics of the COVID-19 Crisis (pp. 45-61).
Springer, Cham.