The effect of Covid-19 on the UK hospitality industry: A Marriott case study

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The effect of Covid-19 on the UK hospitality industry: A Marriott case study



The effect of Covid 19 on hospitality industry in the UK: A case of Marriot






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Chapter 1: Introduction

1.1 Background to the research topic

Covid-19 is a new strain of SARS-CoV-2, which start and spread from Wuhan city of China in December 2019 (Devahli et al., 2020). After identifying the seriousness of this disease, World Health Organization declared Corona virus as a global pandemic in 2020. Due to the Covid-19 pandemic, every individual gets affected along with each sector on a global level. Various sectors got affected by covid-19, which includes; construction, manufacturing, education, and hospitality industry. Due to this pandemic, governments, firms, and societies get challenged tremendously. Various sectors get lucky and only suffered minimal consequences; however, organizations related to the hospitality sector had lost their business for several months. By presenting unprecedented circumstances and restrictions on travelling and social distancing, hospitality industry has to suffer significantly and various peoples lost their jobs. Also, the supply chain market and economy get affected due to pandemic. According to Ntounis et al. 2022, it can be stated that due to the lockdown in England on 23rd March 2020, business-related with hospitality are generally closed. The hospitality industry is a group of various businesses, which help to provide services to its consumers. There are three basic areas of this industry, which include; beverage, accommodations, and food. This industry includes; clubs, hotels, hospitality services, pubs, and hotels. In the UK alone, more than a million workers get employment due to this industry, which is 7% of the total UK workforce (Kotera et al., 2018). During the pandemic, various organizations related to the hospitality industry faced considerable financial challenges due to global lockdown, restrictions on travel, and measures of social distancing. Along with loss of job, employees related with hospitality industry faced the mental stress and anxiety along with depression. Also, the hospitality industry faced the greatest decline in staff and millions of employees related to the hospitality industry lost their jobs. During that period, several hotels changed themselves to provide corporate social responsibility (CSR). The research done by Bajrami et al. 2020, the hospitality industry is one of those sectors that were highly affected by the outbreak of Covid-19. Both the demand and supply sides of the hospitality industry are severely get affected by the Corona virus. Along with the industry, the employees and consumers that are related with hospitality industry also gets influenced by the pandemic.


1.2 Background to research organization

It can be stated that the hospitality sector was one of the earlier sectors that got influenced by the pandemic and it will be the last sector to recover from the restrictions of Covid-19. According to Dube et al. 2021, hundreds of billion dollars gets contributed by this industry to the global economy; meanwhile, millions of persons get employment by this industry. However, after the spreading of effective measures of Covid-19 pandemics, such as; social distancing, this industry gets affected highly. After the implementation of lockdown in various countries, various organizations related to the hospitality industry get affected and Marriott Hotels are one of them. Marriott hotels are started in 1927 by J. Willard Marriott (Marriott, 2022). Currently, Marriott hotels are available in various countries with the availability of more than 7500 hotel properties on a global level. There are more than 120 hotels of this organization are available in the UK and 59 hotels are available in London alone. However, along with several other hotels and clubs, this organization also got influenced by the Covid-19 pandemic. Due to the guidelines of pandemics, the organization had to take several steps for reducing the financial loss. More than 174,000 employees and workers are placed on furlough by Marriott International during the spread of pandemics. However, even after removing the employees, it was not easy to avoid the loss that happens due to the lockdown and stoppage of the supply and demand route. By utilizing the hotel rooms to provide the functionality to health workers, the organization increased awareness about their property. Still, the staff members of the hospitality industry are highly get affected and had to lose their job and employment. Also, the consumers that got stuck in the hotel during the pandemic faced several problems during their stay due to lockdown. Various staff members related with hospitality industry felt depression and anxiety due to job insecurity. Apart from these things, the organization faced several challenges due to the change in guidelines of government regarding the hospitality industry. According to Shin et al. 2021, hotels such as; Inter Continential and Hilton Hotels Groups along with Marriot International changed themselves to provide rooms and donate food for healthcare workers. By providing the services during the pandemic, the organization collected several types of advance benefits, which include; reduction in operating costs, increment in the relationship with communities along staff commitment. The impact of corporate social responsibility (CSR) helped Marriott International to provide a positive impact on three stakeholders, which include; consumers, employees, and local communities. This research will be beneficial to identify the impact of covid-19 on employees and consumers with the help of Marriott Hotels in UK.

1.3 Research Questions

What are Covid-19 and its impact?

How did Corona Virus affect the hospitality industry?

What was the influence of Pandemic on Marriott Hotels in the UK?

1.4 Research aim and objectives

This work is focused to evaluate the influence of covid-19 on the hospitality sector with the help of analysing the Marriott hotels. For achieving that purpose, the following objectives are selected. These objectives will be beneficial for analysing the research topic effectively.

Aim

This study aims to examine the influence of the Corona virus pandemic on the Marriott hotels in the UK by reflecting on both the guest statistics and the views of the managers.

Objective

  • To understand the impact of Covid-19 on employees related with hospitality industry.

  • To identify the situation of hospitality industry during the pandemic.

  • To explore the influence of pandemic on the mindset of hotel staff.

  • To explore the regulations provided by government during Covid-19.

  • To understand the impact of Covid-19 on consumer’s related with hospitality industry.



Chapter 2: Literature Review

2.1 Overview

Due to Covid-19, there are various organizations gets affected along with the tourism and hospitality industry. Current research stated that the hospitality industry will be one of the last sectors that will recover from the pandemic. Also, the employees related to this industry faced job insecurity along with depression. It is necessary to implement strategies to improve the condition of organizations related to the hospitality industry. The following literature review has analyzed and studied several journals and articles to understand the impact of Covid-19 on the hospitality industry and strategies used to overcome it.

2.2 Impact of Covid-19 on Hospitality Industry

After the emergence of Covid-19, some organizations were affected slightly or recovered rapidly. However, the organizations related to the hospitality industry faced several issues and had to lose their business for several months. The research done by Breier et al. 2021, stated that for recovering from the crisis of covid-19, organizations must innovate their business models. The research aims to understand the role of business model innovation (BMI) in the hospitality industry during covid-19. Several organizations and hotels have already implemented effective business models successfully. For achieving that purpose, the researcher adopted multiple case study methods. The finding of this research stated that the implementation of business model innovations during and after the pandemic provided new sources of revenue while securing a high level of liquidity. The research also stated that aid from the government can be considered as one of the essential factors for surviving a pandemic. So, it can be stated that the innovation of several business models can be considered as a strategic response to the crisis of hospitality firms. However, there are several limitations of this research, which include; the unique setting of a covid-19 pandemic. There are various disasters and crises affected the hospitality industry in recent decades. According to Shapoval et al. (2020), there are several major outbreaks related to the virus that happened in the last 50 years before covid-19, which includes; Ebola, H1N1, and H7N9. This research aims to understand the effect of a covid-19 pandemic on the hospitality industry. For achieving that purpose, the researcher utilized social system theory. The study utilizes an inductive qualitative approach along with conducting the in-depth interview. With the help of social system theory, it becomes easier for the researcher to understand the feelings and attitudes of hotel managers while identifying the impact of covid-19 on their workplaces and personal lives. However, there is a limitation of this research, which includes; the lack of generalizability of quantitative research. Still, this research helps to understand the impact of covid-19 on the hospitality industry.

Figure 1: Impact of Covid-19 on Hospitality Industry

(Source: Hughes Systique, 2020)

In December 2019, covid-19 firstly appeared in Wuhan, China, and was declared as a world pandemic by the World health organization. The research done by Khan et al. (2021), aims to understand the impact of covid-19 on the hospitality industry. The researcher stated that covid-19 leads the world towards severe socio-economic crisis along with psychological distress. The researcher conducted an online survey to achieve the purpose. The finding of the research stated that employees related to the hospitality industry felt anxiety and a sense of insecurity about being unemployed during the pandemic. Also, the employees felt mental pressure due to insecurity of job. The result of the study stated that open innovation in the hospitality industry can provide development in the organization as it is an imminent field of advancement. This research helps to understand the mental state of employees during the pandemic related to the hospitality industry. Also, this research can help organizations deal with the employee’s non-employability threat by providing them training keeping them updated with advanced knowledge practices. The research done by Alonso et al. (2020), stated that due to the pandemic, the tourism and hospitality industry of Europe lost more than one billion euro’s on a monthly level. This research aims to explore the aftermath and impact of covid-19 on hospitality firms. The researcher utilized qualitative research along with a purposeful sampling method for achieving the purpose of this study. The research utilized 45 hospitality firms from several countries for the diversity of data. There are five organizations selected in this research that is established in the UK. The study helps to understand the actions of managers and owners of the hospitality industry during the event of a pandemic

2.3 Impact of Covid-19 on Employees related with Hospitality Sector

The global pandemic highly affected the workforce-related to the hospitality industry. According to Baum et al. 2020, the hospitality industry can be considered as one of the last sectors that will recover from the effects of a pandemic. This research aims to identify the impacts of pandemics on the workforce of the hospitality industry. For achieving that purpose, the research utilizes three levels, which include; macro, meso, and micro. In, the macro-level includes policies and government, whereas organization comes under the meso level. In the end, the study understands the micro-level, which identifies employees. The research stated that several employees that work in the hospitality industry lost their job during the pandemic. This finding of this research helps to understand that employees working in the hospitality industry were excluded from various emergency solutions. This study helps to identify the challenges faced by workers related to the hospitality industry.

2.4 Impact of Covid-19 on Employees related to hospitality

More than six million people got infected globally due to the emergence of Covid-19. The research done by Kang et al. 2021, aims to understand the impact of Covid-19 on employees related hospitality industry. After the implementation of lockdown, more than 50 million jobs related to the hospitality industry come at a risk. It also forced the employees to take unpaid leaves from the organization, while their salaries and employment hour gets reduced. Also, the employees get affected with extreme levels of stress and anxiety related to work during a pandemic. For a better understanding of employees’ situations, the researcher used the snowball sampling method. The research helps to understand that employees did not feel job satisfaction along with organizational commitment while feeling the fear of pandemics. The finding of research stated that organizations needed to implement strategies along with instrumental resources, such as; safety glass and facial masks for reducing the work-related stress of the employees. Meanwhile, the research done by Zhang et al. 2020, aims to examine the effect of hotel safety leadership on employee safety behavior during the Covid-19 pandemic. Due to the interaction between guests and employees, the risk of getting affected by Covid-19 increased exponentially. The researcher designed a questionnaire design for a better understanding. A total of 23 hotels were selected and the researcher got more than 1,500 responses a statistical analysis technique is utilized for analyzing the data. The finding of this research stated that it is essential for organizations related to the hospitality industry to implement safety leadership. As this implementation affects the safety behavior of employees in a positive direction. This implementation also influences the restoration of belief in employees about the organization. The research helps to understand the risk faced by employees related to the hospitality industry during the Covid-19 pandemic.

Due to the restriction on travelling along with the prohibition on social gatherings, the employees related to the hospitality industry faced several challenges. The research done by Yan et al. 2021, aims to understand the depression and risk perception of hospitality workers during pandemics. The research helps to understand that employees that are working in the hospitality industry are suffering from challenges related to mental health, which include; depression, compulsive behavior, along with anxiety. The researcher developed an online survey to collect authentic data to achieve the purpose. The finding of this research stated that increment in economic pressure along with job insecurity influenced the negative feelings in workers related to hospitality. Also, the researcher utilized the transactional theory of stress and coping for a better understanding of employees’ conditions. The limitation of this research is the lack of job insecurity challenges during the pandemic and its impact. On the other hand, the research done by Aguiar-Quintana et al. 2021, aims to understand the influence of job insecurity on hotel employees’ anxiety and depression. Also, this research helps to understand the impact of these psychological strains on the performance of the employees of the hospitality industry. The hospitality industry can be considered as one of the largest employers globally. Still, employees related to the hospitality industry faced job insecurity during the pandemic. Along with the risk of job insecurity, the workers felt the risk of getting infected by the coronavirus. Some various strategies and measures can be implemented by the hotel managers that can reduce the anxiety and depression in employees related to hospitality management. These measures include the disinfection of guest rooms, acquisition of personal protective equipment, and ensuring the compliance. This research helps to understand that insecurity of job affected the development of depression and anxiety along with emotional exhaustion.

2.5 Strategies used by Organizations during Covid-19

Due to covid-19, the economy of the world was shut down almost overnight. According to Gursoy and Chi 2020, the hospitality industry faced an unprecedented challenge due to pandemics. Various organizations related to the hospitality industry faced temporary closure due to several strategies to reduce Covid-19, which are; social distancing, restrictions on travel, and community lockdown. The researcher stated that the order of stay-at-home and lockdown increased the decline in hotel occupancies. Even after the development is necessary precautions and ease in restrictions, the hospitality industry will be one of the last that recovers from this crisis. While it is recovering slowly, the covid-19 will continue to exert an impact on the operation of hospitality businesses.

Figure 2: Strategies Implemented During Covid-19

(Source: Dertouzos, et al., 2020)

The finding of this research stated that even after the re-opening of hospitality restaurants, the consumers will not immediately come back. Also, it will be difficult for the consumers to make reservations in hotels immediately as the consumers do not feel comfortable during the pandemic. The result of this research stated that it would be necessary for hotels to implement the effective integration and adoption of technology, such as; artificial intelligence to increase popularity and public safety reasons. Meanwhile, the research done by Jian et al. 2020, stated that consumers are feeling fear and willing to pay more for staying in green hotels. This research helps to understand that Covid-19 affects the consumers staying in hotels and understand the importance of the environment. Hotels that are implementing green innovations in their practices are getting more trust from consumers towards their brand. So, it can be stated that organizations should start implementing green practices in their hotels.

2.6 Various Strategies implemented by UK government for Hospitality Industry

The United Kingdom implemented the lockdown on the 23rd of March 2020 due to covid-19. The research done by Flynn et al. 2020, aims to understand the influence of Covid-19 on the population of the UK along with policies made to respond to that pandemic. In the United Kingdom, the first case of Corona Virus was reported in January 2020, which is caused by severe acute respiratory syndrome Coronavirus 2 (SARS0CoV-2). The researcher utilized economic, epidemiological, and business data from several government sources. The data collected from government sources make this research more ethical. The finding of this research stated that there were more than 45,000 deaths took place in the UK alone due to SARS-CoV-2. There are various schemes are provided by the government during the pandemic for the betterment of business organizations. The government of the UK granted business rate holidays for the 2020 to 2021 tax year for organizations related to the hospitality and leisure sector. Also, approx £25,000 were provided to businesses that are working for the industries related to the hospitality and retail sectors by the government of the UK. It can be stated that the Covid-19 affects highly negatively on the population of the UK along with businesses and the economy of the nation. The emergence of Covid-19 highly affected the world economy in a significant way.

After the cases of Covid-19 get down, the hospitality sector is reopening in various countries. The research done by Kim and Liu 2021, aims to explore the revival of the hospitality industry after the removal of lockdown in the United Kingdom. The researcher utilized the propensity score weighting experimental design method for a better understanding of people’s reactions to the hospitality industry. The researcher selected the residents of the UK that are 18 and above with the experience of staying in a hotel. A Global Market Research Company named Dynata is selected for the collection of data. The government of the UK launched the scheme named Eat Out to Help for the recovery of the hospitality industry. The finding of this research helps to understand the behavior of consumers in hospitality that gets affected by the Covid-19 pandemic. Also, the practices of social distancing measures were understood due to this research. The organizations related to the hospitality industry can attract consumers with little promotion if they build trust earlier. The government of the United Kingdom implement the lockdown in March 2020 for slowing the spread of Covid-19. According to Hills and Eraso 2021, the guidelines provided by the government of the UK required the public to stay at home and only travel from and to work when working from home is not possible. The government also implements a shielding policy for extremely vulnerable individuals. The research aims to understand the factors that are associated with non-adherence to social distancing rules during Covid-19. The researcher utilized a cross-sectional survey and conducted an online survey. With the help of maintaining social distancing, the spreading of the virus can be reduced. The finding of the research stated that almost half of the participants broke the rules of social distancing due to anti-social psychological factors. This study helps to understand the factors that affected the individuals to break the rules of social distancing.

Figure 3: Effect of Covid-19

(Source: Rahman, et al. 2021)

In North East England, the tourism and hospitality industry is considered the fourth largest sector. The research done by Spanaki et al. 2021, stated that the vulnerability of organizations related to the hospitality industry gets affected by the decision-making of consumers. The researcher utilized qualitative methodology on hotels stated in the North-East part of England. Organizations such as; Hilton and Marriott stated in North-East of England provide a total economic footprint of approx £610m. The research helps to understand that the hospitality and tourism industry is an essential sector in England. Still, several organizations filed for bankruptcy and cut jobs during the situation of pandemics. The managers of these hotels had to face several problems due to imposed restrictions, such as; specifications of meeting room and event conduction. Also, there were several changes implemented on foods and beverages, while the gym and spas were closed during the pandemic. The research also helped to understand that hotels in England faced a reduction of 50 to 70% in their occupancy even after providing the discount. The emergence of pandemics implements long-term impacts on the hospitality industry. The research done by Le and Phi 2021, aims to understand the strategic responses of the hospitality and hotel sector to Covid-19. For a better understanding of hotels response, the researcher collected and analyzed more than 200 articles on this topic. The researcher helps to understand the response of the government of the UK for the hospitality industry. The UK government provided wage subsidies while reducing taxes on organizations related to the hospitality industry. Also, several stimulating packages were launched by the government along with flexible payment methods and loans. Also, Marriott hotels started their branding through corporate social responsibility (CSR) along with providing accommodation services for health workers freely. The aid provided by the government helps the organizations to keep working with a minimum amount of finance. Also, the organizations used saving methods while reducing the salary of employees to keep working during the lockdown.

2.7 Effect of Covid-19 on Consumers related with Hospitality Industry

For reducing the transmission of the corona virus, the government of the UK implement a national lockdown in May 2020. The research done by Gordon-Wilson 2021, aims to explore substitutions of British pub consumers during the Covid-19 crisis. Organizations related to Pubs are related to the hospitality industry. For achieving that purpose, the research utilized a two-stage research method design, which consists of netnography along with semi-structured interviews. The finding of this research stated that lockdown and Covid-19 affected future desire and consequently on demand of consumers for services related to the hospitality industry. Also, covid-19 affected consumers’ preferences regarding the hospitality industry. After the pandemic, the consumers started to consider scarce hospitality businesses to be less safe and have lower consumer purchase intentions. Before the pandemic, the pub sector in the UK was estimated to produce revenue of £25 billion. The finding of the research stated that consumers identify a pub as a place that provides tangible elements like the product and intangible elements such as; entertainment and drinking occasions. Meanwhile, the research done by Ruffolo and Jimenez 2021, stated that the concerns and accommodation of consumers have changed significantly. Currently, the concerns of consumers are related to safety and health measures. So, the organizations related to the healthcare sector need to satisfy the demand of consumers while restoring the confidence of travellers while following strict safety regulations. The researcher utilized a mixed method approach to examine the websites of Central England’s hotel websites. The finding of this research helps to understand the practice and initiatives of luxury hotels during Covid-19 in the UK. The hotels strategically focused on hygiene, marketing, and workforce for achieving the preference of consumers.

2.8 Strategies used by Marriott Hotels during Pandemic

Covid-19 affected the organizations related to the hospitality industry in the worst possible way. Due to the lockdown, the organizations had to shut down for several months globally. The research done by Sharma et al. 2021, stated that organizations are forced to innovate and adapt to unprecedented changes. After the governments start removing lockdown with proper guidelines, it becomes the responsibility of organizations related to the hospitality industry for providing the services with proper preparations. Marriott hotel starts utilizing several technologies, such as; cleaning robots and electrostatic sprayers improving the enhanced disinfection. The research helps to understand that an organization needs to implement several innovations in its business structure. Also, hotel innovation related to Covid-19 is beneficial for improving market value along with the performance of the organization. Meanwhile, the research was done by Shin and Kang 2020, also stated that technology innovation can play an effective role in the recovery of the hospitality industry. The researcher aims to identify the influence of expected cleanliness and interaction on hotel booking during a pandemic. There are various organizations, which include; Hilton and Marriott hotel that adopted and implement several technologies that can help to provide social distancing. With the help of these technologies, not only interaction of staff with consumers can be reduced along with enhanced cleanliness procedures. There are various technologies, such as; mobile check-in systems and electrostatic sprayers for reducing health risks. Also, Xenox robots are utilized by the hotels, such as; Marriott and Hyatt for improved disinfection. These robots can clean the rooms and lobby without interacting with guests and staff members. Global Cleanliness Council was also launched by Marriott hotel to promote higher standards of Cleanliness in Covid-19. This research helps to understand that adopting innovations is essential to provide a different sense of safety to the consumer.

2.9 Planning for the development of Hospitality Industry

The Covid-19 affected the value and supply chain of the hospitality and tourism industry. The research done by Jones 2022, aims to review the recovery plans of the tourism and hospitality industry of the UK. The tourism and hospitality industry can be considered as one of the major elements of the economy of the UK. This research helps to understand the role of government in the development of the tourism and hospitality industry of the UK. Due to the lockdown and restrictions during Covid-19, the supply and value chain of the hospitality and tourism industry got highly affected. For the hospitality and tourism industry, the UK government provided a job retention scheme of £12 billion along with bounce bank loans of £5 billion. The government of the UK also reduced the value-added tax, which is related to the hospitality industry. This research helps to understand various policies and strategies provided by the government of the UK for the development and improvement of the hospitality & tourism industry of the UK. Various organizations related to the hospitality industry faced threats due to the emergence of the Covid-19 pandemic. The research done by Canhoto and Wei 2021, analyzed the development of the hotel’s recovery strategy, which is situated in England, UK. The researcher utilized the case study method. It becomes easier to understand about various schemes of the UK government. With the help of the furlough scheme developed by the government, the 80% of staff working in organizations returned. The employees working in restaurants, hotels, and pubs get back to the work due to this scheme of the UK government. There are majorly three groups of stakeholders that affect the recovery of the hospitality industry, which are; Employees, Consumers, and Government. It also becomes easier to understand that organizations implement CSR due to the pressure generated by stakeholders along with cultural and competitive advantage.

2.10 Conclusion

In accordance to the review and analysis of research done by several researchers regarding the impact of covid-19 on hospitality industry along with the employees connected with it, it ensures the future development of this industry. It can be summarized that the implementations of several strategies provided by government along with improving the trust towards consumer, the hospitality industry of UK can once again come to a stable position while providing effective services.

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