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VS1 Cloud Blog

What is the Impact of COVID-19 on the Global Hospitality Industry?

10th Jul 2020 | Hospitality

Article by: Hassan Djeebet

Coronavirus, now globally carrying the status of a pandemic, has led to a worldwide crisis with its effects on the hospitality industry potentially heavier than those of 9/11, SARS, and the financial crisis in 2008. This time, however, the hospitality industry has never experienced and sudden downturn. Putting the human at the center of the situation, the virus generates deep fear, confusion, and impacts us in a deeply emotional way that this generation has never felt. Of course, on top of this, physical confinement is aggravating the situation.

On a business level, the impacts of the crisis have reached every industry in the world, with the travel and tourism taking a massive hit. According to OAG Aviation Worldwide, the travel restrictions on international flights have caused the global airline industry losses mounting up to $880 billion. Many hotels find themselves empty and looking to fill the once full lobbies and rooms. Nevertheless, the grave situation has given space for worldwide solidarity with many hotels around the world providing their premises to house medical staff, first responders, or hospital patients not suffering from coronavirus.

Food service teams and chefs worldwide are mobilized in order to arrange free meals to the medical staff while putting themselves at risk in order to battle the crisis. In France Christophe Raoux, the executive chef at Ecole Ducasse, together with Fabrizio Cosso, the executive chef at Eataly prepare meals for medical personnel at Bichat Hospital in Paris. Another initiative is taken by Fabien Foare and Benoit Carcenat holding the respective roles of the executive chef and the director in culinary arts and gastronomy at Glion Institute of Higher Education in Switzerland. Both shall be working on chocolate eggs to lift the mood of medical staff at the hospitals of Chablais, CHUV and Fribourg. In Spain at Les Roches Marbella F&B team lead by Head Chef Silvio Patrucco and Mr. Moeed Shah Head of Practical Operations are on continuous challenge, facing the difficulties daily with personal risk and an emotional sacrifice in order to provide our students (who are stranded, confined and away from their loved ones) with well balanced meals, the team also constantly brainstorms concepts in providing an element of surprise and a personal service, keeping students motivated in this time of great crisis.

Governments will have to play a huge role in saving the hospitality industry. France, Switzerland, Spain and other European government have promised aid tallying millions of euros towards rescuing all types of local businesses hit by the Coronavirus, and with similar practices adopted by many governments in other parts of the world.

Entities such as bed & breakfast, hostels, pubs & clubs, cafés, restaurants, bistros and beach bars to name a few, being small family businesses are very likely to live the crisis much worse than other actors in the private sector due to being intrinsically vulnerable to change. They shall be heavily affected by the change in the supply chain, the lesser demand, some of them might partially or even fully shut down until the recovery can take place.

With such heavy impacts, the hospitality industry will have to learn to function in a way not seen before. As the relationship between each brand and consumer starts by building trust, regaining customer confidence will be the first step in overcoming the crisis. Strict sanitary and hygiene measures will need to be applied, with new practices put in place to monitor and control the environment in which the business takes place.

As in all crisis situations, the communication should take the lead role in reaching out to the customers in a gentle and non-aggressive manner to reassure them of the safety in their decision to start travelling again. Promoting the business should be done in a positive manner, showing the benefit to the customer and providing the travelers with a light at the end of the tunnel. The players of the industry should consider how to emotionally and sensitively receive the travelers once confined in their homes after the lockdown is lifted.

Due to the heavy worldwide impacts of COVID-19, the humanity shall walk into a new era of a post-crisis world which will require the players of the industry to adapt their approach towards the new traveler. This will allow for new concepts to be developed aiming to benefit the society in need of emotional retreats and focusing on psychological wellbeing.

The change will also apply to the players in hospitality industry on the employer level. With the new approach to remote working, the businesses shall have to adapt to the emerging trends in the work practices. The efficiency of current work models will have to be reevaluated and the employee wellbeing should be put even higher in the priority list. With the long-term confinement starting to show effects on people, "permanxiety" — the near-constant state of anxiety travelers experience due to geopolitical events, climate change and other local issues - will have to be taken into account when asking staff to get back to traveling to the countries recently recovered and previously considered as high risk.

However, as much as the travelers rely on the hospitality industry to be understanding, the businesses are equally in need for the right decisions made by the public. The world travel should not be cancelled but rescheduled for immediate future. By mutually being sensitive, respectful and showing solidarity, both the companies and the consumers should adopt the same message: live for today and plan for tomorrow.