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COVID-19 Impacts and Recovery Strategies: the Case of the Hospitality Industry in Spain

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COVID-19 Impacts and Recovery Strategies: the Case of the Hospitality Industry in Spain sustainability Article COVID-19 Impacts and Recovery Strategies: The Case of the Hospitality Industry in Spain José Miguel Rodríguez-Antón * and María del Mar Alonso-Almeida Business Organization Department, Universidad Autónoma de Madrid, 28049 Madrid, Spain; [email protected] * Correspondence: [email protected] Received: 10 September 2020; Accepted: 13 October 2020; Published: 16 October 2020 Abstract: The health crisis caused by the pandemic COVID-19 has been of such magnitude that the drop-off in economic and tourist activity in most countries is generating an economic crisis with consequences that are still difficult to measure. The present work analyses the origins and evolution of the coronavirus pandemic and reviews the literature related to the impacts and recovery strategies that were implemented in previous crisis situations affecting the hotel industry. In order to focus the study on one country, Spain was selected based on tourism indicators, the importance of tourism for this country and the importance of Spain as a leader in international tourist destinations. The influence of the pandemic on the Spanish tourism sector and, more specifically, on its hospitality industry is explored in depth. In addition, the main initiatives to support the tourism and hospitality sector that have been undertaken at the global, European and national levels are highlighted and, finally, the response and recovery strategies of the five largest Spanish hotel chains to guarantee a COVID-19-free stay in their facilities and to recover the accommodation activity are discussed. Keywords: hotels; COVID-19; economic crisis; pandemics; response strategy; tourism; strategy management; health economics 1. Introduction COVID-19—the acronym for coronavirus disease 2019—is an infectious disease caused by the SARS-CoV-2 virus. It was detected for the first time in Wuhan, Hubei province, China, at the end of 2019. Given its rapid expansion, the World Health Organization (WHO) declared a state of sanitary emergency on 30 January 2020; a month and a half later, specifically on 11 March, when the disease had surpassed the epidemic situation, it declared a state of pandemic. Since both the virus and the disease were unknown until then, there were no known drugs to stop the disease or vaccines to protect people against the virus, so the health authorities focused their greatest effort on recommending distance and social isolation (the evolution and characteristics of COVID-19 can be seen on the Johns Hopkins University website at https://coronavirus.jhu.edu/map.html, as well as on the Spanish version of the WHO website at https://www.who.int/emergencies/diseases/novel-coronavirus-2019. Since its detection, the expansion of COVID-19 has been unstoppable and has reached practically all the countries of the world, affecting millions of people and causing hundreds of thousands of deaths. As of 29 September 2020, COVID-19 had affected more than 33 million people and caused more than a million deaths, and the numbering is still counting. The spread of the virus has not been homogeneous nor has its intensity been the same in all affected countries. As of that date, the five countries with the highest number of affected are the United States, with more than seven million and 21,281 per million inhabitants, followed, at a long distance, by India, Brazil, Russia and Colombia. The countries with the highest infection rates per million inhabitants are Qatar, Bahrain, Aruba, French Guiana and Israel, with rates exceeding 26,000 infected per million inhabitants. If we consider the Sustainability 2020, 12, 8599; doi:10.3390/su12208599 www.mdpi.com/journal/sustainability Sustainability 2020, 12, 8599 2 of 17 number of deaths caused by COVID-19, the United States again leads the ranking with more than 203,000 deaths, followed, by far, by Brazil, India, Mexico and the United Kingdom. The countries with the highest mortality rates per million inhabitants are San Marino, Peru, Belgium, Andorra and Bolivia, with rates exceeding 670 deaths per million inhabitants (https://covid19.who.int/table). Although they have certainly saved thousands of lives, prophylactic measures based on distancing and social isolation, as well as strong limitations on all transport, have caused an economic crisis of incalculable effect in most of the countries of the world, whether they have been strongly affected by the virus itself or whether their economic activity is going to be strongly affected through its induced effects. Within the affected economic sectors, the tourism sector was the first affected by these limitations and will be the last to return to the “new normal”. Spain is one of the few countries in the world in which a double situation occurs: tourism is a basic sector of the country’s economy and, at the same time, the country is a leading destination of world tourism. This double circumstance means that Spain is affected by the pandemic caused by COVID-19 in a very negative way and it is essential to have an adequate recovery strategy especially geared towards this sector and its companies. Until now, there has been little research that has analysed the impacts of previous crisis situations [1], and the existing studies on other epidemics have been focused mainly on Asia. In Europe, there is little experience in managing pandemic situations, and their consequences are unknown. The research about COVID-19 impacts and recovery on hospitality is under construction with the most of contributions, conceptual [2,3] or critical reflections [4,5] and very scarce empirical research [6]. However, the current situation shows that the pandemic is not under control yet. Therefore, the situation is unpredictable, and research is essential to help recover tourism and its associated industries [7]. Therefore, this exploratory research, through a case study, aimed to measure and analyse the possible impacts that the pandemic will have on the Spanish hospitality industry. Likewise, it aimed to study the measures that are being taken by the main agents involved and the proposed strategies to speed up the return to normality and minimise the impacts of the economic crisis. To achieve this objective, the following section will present a review of the literature related to the effect of some previous crises on the hospitality industry and the responses that were taken to get out of the situation. The choice of Spain as the centre of the study will then be justified due to the importance that Spain has for world tourism and the importance that tourism has for the Spanish economy. Next, the influence that COVID-19 is having on the world and the Spanish tourism sector will be explored, establishing medium-term forecasts based on the different scenarios with which the World Tourism Organization (UNWTO) is working. Then, the initiatives that are being implemented at the international and Spanish levels to support the emergence of the crisis generated by the pandemic will be analysed and, finally, the conclusions of the study will be presented, which will include the appropriate recommendations for the hospitality industry. 2. Literature Review: Crisis Situation and Hospitality Industry When crises situations such as COVID-19 happen, they force hospitality companies to change their operating strategies. These events generate high levels of uncertainty and usually require quick responses in facing negative impacts [8]. Nevertheless, previous research has shown that there is little preparedness for a crisis situation in the hospitality industry [9], due mainly to a lack of devoted resources [10] and a lack of knowledge and experience about how to act [11,12]. Previous research has focused on destination response and recovery with little research specifically in hospitality responses and recovery strategies. However, the little research unanimity that exists has found that crisis situations have a strong impact on the hospitality industry. Table1 presents a literature review focused on the hospitality industry classified by type of crisis impacts and response and recovery strategies. The immediate-term impacts are a severe decrease in tourists, occupancy levels and a fall in average daily rate (ADR) and revenue per available room (RevPar). In the short term, other impacts, such as job cuts, changes in operations and reduction in services, threaten the recovery Sustainability 2020, 12, 8599 3 of 17 of the hospitality industry. In the medium–long term, difficulties in collecting loans, postponed future investment plans or difficulties in paying debts can accelerate the return to normal activity. Summarizing, the main response strategies are focused on cost reduction, push and relaunch local market, price reduction, preparation of contingency plans and human resource policies. Table 1. Hospitality industry and crisis: impacts and recovery strategies. Type of Crisis & Geographic Authors, Year Description of Impact Response and Recovery Strategies Area Terrorism Dearth of businesses; Ensuring a coordinated response of Stafford, Yu & Terrorist attacks Occupancy levels and room hospitality industry; Pushing to reopen Armoo 2002 of 11 September rates drop; Severe disruption of airport and other major tourist [13] 2001 USA normal operations attractions; Building a marketing plan Terrorism Push local market; marketing strategies; Taylor & Enz Occupancy levels, Average daily Terrorist attacks Human resources strategies; Focus in 2002 rates (ADR) and Revenue per of 11 September new segments; Cost rate-cutting [14] room (RevPar) drop 2001 USA
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