Editorial: Brief retrospective of pandemics and the hospitality, tourism and events industry: signs and strategies of resilience and rebound

Citation

Criscione-Naylor, N. and Fiocca, J. (2024), "Editorial: Brief retrospective of pandemics and the hospitality, tourism and events industry: signs and strategies of resilience and rebound", International Hospitality Review, Vol. 38 No. 1, pp. 2-10. https://doi.org/10.1108/IHR-04-2024-079

The hospitality, tourism and event industry (HTE) has shown time and time again its ability to adapt and regain growth despite significant events and disturbances that have challenged its livelihood. These events have ranged from natural disasters, attacks on human freedoms and life and the spread of infectious disease, to name a few. Often, the remarkable resilience of the HTE industry – the ability of the industry to recover and adjust to disturbances – has been a source of hope for the COVID-19 pandemic that has plagued the globe (Lombardi, Pina e Cunha, & Giustiniano, 2021; Prayag, 2020; Ritchie, Crotts, Zehrer, & Volsky, 2014; Walker, Holling, Carpenter, & Kinzig, 2004). In early March 2020, the World Health Organization (WHO) declared COVID-19 a pandemic – a disease outbreak occurring over a wide geographic area and affecting an exceptionally high proportion of the population (WHO, 2020).

Globally, 26% of businesses from the pandemic declaration were non-operational for an extended period, with significant variation at regional and country levels. The sectors with the most business closures included travel/tourism agencies, 54%; hospitality and event services 47%; education and childcare services 45%; performing arts and entertainment 36% and hotels, cafes and restaurants 32% (Goldstein, Gonzalez-Martinez, Papineni, & Wimpey, 2020). According to Yelp’s Local Economic Impact Report (2020) more than 163,735 businesses were temporarily shut down, with more than 97,966 businesses permanently closed due to the pandemic in the United States of America alone between March 2020 and March 2021.

Prior to the pandemic, the HTE industry demonstrated rapid growth and expansion globally and was forecast to continue at or above its current pace. From 2009 to 2017, USA hotel gross bookings grew from $116 billion to $185 billion and airline revenue jumped from $155 billion to $222 billion (Deloitte, 2019). Specific to the events industry, it generated more than 5.9 million jobs in the USA and the projected growth for meeting, convention and event planners was expected to increase 11% between 2016 and 2026, faster than the average. There was annually an upward of 1.9 million events held, with 251 million participants, $1.07 trillion in direct spending and drawing 1.5 billion participants globally, $48 billion to provide food and beverage services, 300 million room nights annually and $50 billion to spend on accommodations (EventMB Studio Team, 2019). However, COVID-19 has been a long-lasting, debilitating phenomenon that has impacted all areas of the HTE industry with mandated guidelines and the general public's overall concern for health and safety. As we pass the two-year anniversary of the pandemic outbreak, there is still a global concern for health and safety and questions of when the industry will fully rebound.

Accordingly, this article provides perspectives on resilience in the HTE industry with a retrospective on local outbreaks of infectious diseases that became global pandemics and the response and rebound of the industry following the disturbances. This includes the Severe Acute Respiratory Syndrome (SARS) of 2003 and the Swine Flu of 2009. Furthermore, this article reviews indicators that demonstrate the HTE industry has begun to rebound despite variants of the COVID-19 virus plaguing the world. This article shares examples of best practices in epidemic preparedness and strategies for the workplace to support industry resilience. Furthermore, a brief examination of past recovery data will provide insight on a plausible timeline for COVID-19 recovery and rebound.

Resilience in the HTE industry

Through the decades, the world has experienced a variety of disturbances. These disturbances have ranged from natural disasters to earthquakes, terrorist attacks and more. Each disturbance has uniquely challenged the operational protocols and systems in place that support the HTE. These disturbances have also influenced the travel behaviors of customers, which is expected and has been well documented in the literature (Nair & Sinha, 2020; Prayag, 2020), which requires organizations to focus on identifying their own system’s vulnerabilities, examining business practices for crisis management and directing efforts on resulting short-term as well as long-term organizational change and consumer behavior (Prayag, 2020; Suk & Kim, 2021).

The COVID-19 pandemic is a global crisis affecting almost every region and sector with no uniformity in the spread of the virus or prevention efforts – as one country appears to be recovering, another is experiencing its peak of the pandemic, or a new variant of the virus emerges in areas thought to be safe (Nair & Sinha, 2020). In this context, the HTE industry must evaluate the interactions between travel history, destination choices and travel behavior to successfully recover and prove once again its capacity to be resilient among COVID-19 devastation (Prayag, 2020; Nair & Sinha, 2020; Suk & Kim, 2021). According to Walker et al. (2004), resilience is, “the capacity of a system to absorb disturbance.” Furthermore, it is the ability of the system to reorganize and retain core functions, structure and identity for which resilient leadership and improvisation are necessary (Lombardi et al., 2021; Prayag, 2020; Ritchie et al., 2014). Although there is not one comprehensive definition of resilience for organizations, Walker et al. further clarified its characteristics of latitude, resistance, precariousness and panarchy that have helped researchers understand macro-level issues of resilience building, including how much change the tourism system can absorb before there is system failure (Prayag, 2020).

These characteristics describe the stability of the system, how easy or difficult it is for the system to adapt and modify its processes and actions and the amount of change necessary to recover before losing identity or the ability to operate. Lastly, the characteristics draw attention to the interactions that occur among the system and contribute to the system’s ability to recover. This includes influences from states and dynamics at scales above and below such as external oppressive politics, invasions or even market shifts (Lombardi et al., 2021; Ritchie et al., 2014; Walker et al., 2004). In the following sections, two epidemic outbreaks of infectious diseases that became global pandemics are examined to understand each event’s short- and long-term impact. Furthermore, a brief examination of past recovery data provides insights into recovery and rebound timelines. The disturbances include the SARS outbreak in 2003 and the Swine Flu of 2009. These events were selected as they are most closely related to the COVID-19 pandemic in nature and have been associated with the industry’s preparedness at the onset of COVID-19.

Retrospective on two critical pandemics

As per the Center for Disease Control and Prevention (CDC, 2020c), “an outbreak is called an epidemic when there is a sudden increase in cases…when a disease then spreads across several countries and affected a large number of people, it is classified as a pandemic.” Across the world there have been several accounts of epidemics and declared pandemics, yet many have failed to yield such devastation as the 2020–2021 coronavirus peak with 2.7 million deaths worldwide, of which 549 thousand deaths were in the USA (Ritch et al., 2021). Past episodes have led to the development of many national preparedness and response plans that have allowed the world to respond more quickly to outbreaks and offer best practices for survival, as well as offer a glimpse into an unwavering, positive future of recovery – contributing to the resilience of the industry.

SARS is a viral respiratory disease caused by a SARS-associated coronavirus, first identified at the end of February 2003 during an outbreak that emerged in China and spread to Australia, Brazil, Canada, China, Hong Kong, South Africa, Spain and the U.S. (WHO, 2020). According to Keogh-Brown and Smith (2008), the SARS outbreak was perhaps the first instance of a concurrent global concern for the economic impact that may result. Approximately 10,000 individuals were infected, of which 10% died; the overall impact on health was far less devastating than initially feared. However, after the World Health Organization issued a warning against non-essential travel to SARS-affected destinations, there was a noticeable, negative impact on travel and tourism income for infected countries. It was also anticipated that industries in which people gather in public places, such as restaurants, cinemas and retail establishments, would be the most impacted (Smith, 2006). Average hotel occupancy rates across the industry fell by almost 30% between May and June 2003 and disproportionately impacted areas identified as sources of the virus, such as Hong Kong, that experienced an 80% decrease in tourist bookings (Chien & Law, 2003). The global economic loss from SARS was estimated to be USA 40 billion, yet Lee and McKibbin (2004) argue this does not sufficiently provide a full picture due to linkages within economies, across sectors and across economies in both international trade and international capital flows. Quickly, Hong Kong’s economy rebounded and grew more than 11% in 2003 from 2002 (Dvorak, 2020).

The 2009 Swine Flu pandemic was an influenza pandemic that lasted 19 months, from January 2009 to August 2010, and was the second of two pandemics involving H1N1 influenza (CDC, 2010). More than 214 countries and overseas territories or communities had reported laboratory-confirmed cases, including at least 18,449 deaths (WHO, 2020). Swine Flu cost many regions millions of dollars in lost revenue and forced hotels to temporarily suspend their operations. Although the impact of the pandemic was disproportionate, some locations such as Mexico were dramatically impacted, bringing into question the industry’s resilience and rebound timelines. In the case of Mexico, after the first weeks of the quarantine, 90% of the country’s hotel and transportation reservations were canceled, along with 290 cruise ship arrivals, dropping 82% in the total number of tourists visiting the area (Beaubien, 2009; Brito, 2020). This alone caused 22 hotels to temporarily suspend their operations and more than 10,000 waiters, cooks, maids and other hotel employees to be furloughed from their jobs, with over $3.4 billion in losses from touristic activities. As reported by the World Bank, the Mexican economy recovered, growing by 5.1% in 2010 and an average of 3.2% from 2010 to 2015. Although many factors contributed to their recovery, sound government and business policies to mitigate and control the outbreak were paramount.

Crisis management and organizational capability best practices

SARS brought crisis management to the forefront of planning initiatives, especially in Hong Kong. For all, the idea of crisis management has been to help hotel and tourism organizations combat the outbreak of disturbances to survive (Leung & Lam, 2004). Crisis management requires organizations to adjust their organizational culture, structure and management mentality (Fung, Tsui, & Hon, 2020; Leung & Lam, 2004). From these past disturbances, best practices in crisis management supported an organization’s ability to act resiliently and included the development of a communication plan, crisis planning for a variety of situations, employee training and appropriate partnerships. There has also been significant consideration given to crisis management plans to maintain brand integrity and reduce overall customer dissatisfaction and concerns about safety. Ultimately, the failure of organizations to satisfy stakeholders leads to a prolonged impact on business performance, which may be compounded by the general change in travel behavior associated with significant disturbances (Fung et al., 2020; Leung & Lam, 2004).

It is essential for organizations to develop a detailed communication plan and a chain of command to be used in the event of an emergency to ensure information is shared and reported immediately (Fung et al., 2020; Kovaleski, 2006). The communication plan should include key staff, the facility, emergency personnel contacts and communication trees with backup and off-site contacts. Visual diagrams should be included, and all materials should be reviewed and updated annually. The more thorough a plan, the more likely it is that an organization will be able to make immediate and impactful changes. Accordingly, an organization should develop a crisis plan with levels to address a variety of situations such as fire accidents, food poisoning and disease. As reported by Fung et al. (2020), HK CTS Hotels empowered frontline hotel staff and managers to make decisions within categorized guidelines of anticipated crises: “normal,” “serious” and “emergency.” “Normal” level refers to incidents that may affect a small group on the premises, “serious” refers to incidents that may affect the entire premises and lastly, “emergency” refers to incidents that may affect the entire premises and community. Additionally, instruction should be provided for employees to be prepared to handle a variety of situations; for example, a “lockdown” situation versus a bomb threat that requires evacuation (Kovaleski, 2006). On top of these guidelines, the hotel offered detailed training to review expected behavior and responses from staff. The main purpose of the training program was to ensure that hotel staff members were prepared to handle a crisis, regardless of the type. In fact, the hotel offered crisis handling monthly to allow staff to practice handling procedures and emergency decision-making (Fung et al., 2020).

For businesses to drive positive momentum after any disturbance, not only is crisis management planning and execution critical, but maintaining a capable workforce is just as important. McKinsey (2020) suggested that the current COVID-19 pandemic has caused a capability gap in organizations striving to move forward and offered guidelines focused on developing capability and reskilling employees. The skill gap is a result of the global shutdown, which requires many organizations to learn how to exist in a fully remote environment. Reskilling is defined as learning new skills or adapting existing skills based on need and priority.

In one example of workforce capability, a front desk manager has been traditionally trained on how to handle customer service issues, how to pivot to meet a customer’s needs to ensure they leave the facility satisfied and how to develop hotel staff while maintaining the smooth operation of the department and financial (National Center for O*NET Development, 2021b). With more concern for pandemic outbreaks and mitigation, the front desk manager must now focus on new arrival strategies: temperature checks, mandatory mask wearing and sanitizing guidelines. In another example, a sales manager, the first point of contact for an event planner at a facility or venue, is responsible for establishing and maintaining interpersonal relationships, thinking creatively and selling or influencing others (National Center for O*NET Development, 2021a). They now must redevelop their business plans, learn to use technology to communicate with customers virtually, present site visits virtually or hybrid and establish/maintain relationships within the customer’s new expectations. Additionally, the sales manager must develop his/her proficiency in developing a variety of in-person, hybrid and virtual events as part of execution plans.

Utilizing crisis management and reskilling strategies, The Hard Rock Hotel & Casino Atlantic City has proven successful during the COVID-19 pandemic. A few indicators of their success included establishing market-leading safety protocols and bringing back live entertainment within mandated requirements sooner than similar businesses and venues in the area. During the mandated shutdown, the organization worked in conjunction with hospitality experts and sanitation specialists to develop safety protocols that focused on enhanced cleaning practices, social interactions and workplace protocols (Hard Rock International, 2020). When the doors re-opened to the hotel, management and employees were committed to implementing the policies and procedures that have been the most important factor in the hotel’s success and have ensured guests feel safe visiting the destination. Employees were trained on new practices and provided detailed guidelines; they were empowered to make decisions within the protocols. As a result, this hotel has experienced consecutive growth since the onset of the COVID-19 pandemic, starting in Q4 2020 and Q1 2021 (Parry, 2021). Additionally, in December 2020, the resort was the first in its market to bring back live entertainment, offering a holiday series in accordance with regulations and guidelines put in place by the state. This created the opportunity in 2021 to host more live entertainment events, which attracted a larger number of leisure travelers to the destination. As a region, the final casino earnings were up from 2020 as well as above pre-pandemic levels as of April 2022. The Hard Rock Hotel & Casino Atlantic City had a $46 million profit, up from nearly $21 million the year prior; the region experienced a $766.8 million operating profit that not only far eclipsed the $117.5 million delivered in 2020 but also exceeded the nearly $594 million posted in 2019 (Parry, 2021a); Atlantic City Casino’s posted net revenue up 42% to $764.1 million in Q4, while for calendar year 2021, net revenue was $3 billion, an increase of 62.5% (Division of Gaming Enforcement, 2021). The most recent figures show Total Gaming Revenue reported by casinos, racetracks and their partners was $423.7 million for March 2022, reflecting a 17.9% increase from $359.3 million reported in March 2021. For year-to-date, Total Gaming Revenue reported by casinos, racetracks and their partners was $1.18 billion, reflecting an 18.6% increase from $993.7 million reported in the prior period, Q1 2022 (Division of Gaming Enforcement, 2022).

USA HTE industry current state

Since the COVID-19 shut down in March of 2020, the U.S. Travel Association has continued to publish a monthly travel recovery data report. A year after the industry shutdown, on March 25, 2021, “9 in 10 (87%) of American travelers now have travel plans in the next six months—the highest level since March 2020 (U.S. Travel Association, 2021).” The Global Business Travel Association (GBTA), the world’s largest business travel association, conducted a poll of its members across the globe from March 8–14, 2021, in which GBTA members and stakeholders (84%) said they would be “very comfortable” or “comfortable” traveling for business after receiving the COVID-19 vaccination. Another one in ten (10%) are neutral or are uncomfortable traveling for business (6%) (GBTA, 2021a). In addition, meetings and conferences were heavily impacted by COVID-19. Every state had its own regulations on how many people are allowed to meet. In the Harris Poll COVID-19 Tracker, which fielded March 12th to 14th, 2021, among 1,977 USA adults, (60%) are confident that we will “return to normal” by the summer (The Harris Poll, 2021). In accordance with business meetings, APCO Insight conducted an online quantitative survey among 1,000 American adults, including 700 who are working from home and have previously attended face-to-face meetings and conventions as part of their jobs. Eight-one percent say they miss attending in-person meetings and conventions and (81%) will attend as many – if not more – in the future (APCO Worldwide, 2021).

Around 58% of the USA population was vaccinated by June 2021 (Rosenberg, 2021). However, the COVID-19 virus continues to mutate, and the Delta variant, first discovered in India in December 2020 (CDC, 2020a), was responsible for 86.1% of COVID-19 cases within the United States of America (CDC, 2020b). A recent study by Longwoods International suggested that a quarter of American travelers are postponing travel because of the recent increased spread of the Delta variant of COVID-19 (Longwoods International, 2021). The U.S. Travel Association reported that “the Delta variant has negatively impacted upcoming travel plans for one in four Americans (Monthly Travel Data Report, 2021). The Longwoods International study also found that “with coronavirus case numbers, hospitalizations and deaths on the rise again, support among travelers for opening their communities to visitors has also dropped from a peak of 67% in early June to 57% in July 2021 (Longwoods International, 2021).

Business travel, meetings and conferences, on the other hand, are still feeling the positive impacts of the states re-opening and the population being vaccinated. The Global Business Travel Association poll of its members from July 2021 found that “three in four (77%) GBTA members and stakeholders feel their employees are ‘willing’ or ‘very willing’ to travel for business in the current environment (GBTA, 2021b). Additionally, “of the companies that suspended most domestic business trips, nine in 10 plan to resume domestic travel in the near future or are considering resuming domestic travel but have no definite plan” (GBTA, 2021b). On the supplier side, the Global Business Travel Association reported that “seven in ten (70%) suppliers report their bookings from corporate customers have increased from the previous week” (July 6–13, 2021); as of April 2022, this has grown to 75%. Additionally, according to the poll taken by the GBTA July 6–13, 2021, “almost three quarters (72%) of buyers say their company’s travel spend increased in June” (GBTA, 2021c). The data depicts that the industry is on an upward momentum to recovery but will take time to return to 2019 levels. McKinsey’s Global Energy Perspective 2021 (2020) suggests a return to pre-COVID-19 levels in one to four years, depending on the recovery that will unfold. In some markets, as in the case of The Hard Rock Hotel & Casino Atlantic City, this prediction has been accurate; however, not all HTE segments and businesses have experienced the same recovery pattern. Likewise, each market has continued to have unique experiences in their recovery efforts.

Conclusion

Overall, there are several examples of resilience within the HTE industry that have resulted in the achievement and prediction of the above-discussed indicators for a full recovery from the COVID-19 pandemic. The events of the SARS outbreak in 2003 and the Swine Flu of 2009 offered historical data that provides valuable insights and strategies for the HTE industry to continue to recover from the COVID-19 pandemic from its onset in March 2020 and make McKinsey’s one-to-four-year time period plausible. Hong Kong’s economy rebounded more than 11% in 2003 from 2002 (Dvorak, 2020). Similarly, the Mexican economy recovered 5.1% in 2010 from 2009 and an average of 3.2% from 2010 to 2015. These examples make crisis management and workforce capability a priority for the HTE industry to rebound and are essential for an organization to act resiliently in times of crisis.

As the pandemic continues to unfold, researchers and organizations must focus on leveraging best practices as well as planning for the future. Businesses are urged to evaluate systems in place, enhance crisis management planning as necessary, apply lessons learned and be more readily equipped for future disturbances. This article supports the potential for a full recovery, but there is a need for additional research to predict performance in the future with a more thorough investigation within each HTE segment by region and country. Overall, best practices that can be employed now as the pandemic continues to linger includes the development of a communication plan, crisis planning for a variety of situations within the purview of the current pandemic and potential new disturbances, employee training, workforce reskilling and maintaining brand standards. Utilizing these practices will reduce overall customer dissatisfaction and concerns about safety, which are essential during times of crisis. As for COVID-19 and the future of the HTE industry, historical indicators demonstrate the industry will rebound but will take time.