Covid-19 impact on employees in the Sri Lankan Tourism and Hospitality Sector



One of the first and biggest casualties of the Covid-19 pandemic has been the global tourism and hospitality sector (GTHS). Closing of national and regional borders, travel bans, national and local lockdowns, and social distancing protocols has had a massive impact on the sector. This impact is underscored by data from the United Nations World Tourism Organization (UNWTO) which shows a massive 72% decline in international tourist arrivals (ITS) for the period January to October 2020 compared to the same period in 2019 (UNWTO, 2020). Similar to GTHS, ITS to Sri Lanka declined by a massive 73.5% in 2020 compared to the previous year (Sri Lanka Tourism Development Authority, 2020). The massive decline in ITS has resulted in all firms in the sector reporting huge financial losses in 2020. A key strategy adopted by firms in the sector to mitigate the decline in revenue and profits is the laying off of workers. This massive laying off of employees is underscored by a recent report published by Fitch Ratings which revealed that approximately 450,000 direct and indirect workers in the Sri Lankan Tourism and Hospitality sector have been laid off due to the pandemic (Fitch Ratings, 2020). Laying off these employees whilst addressing the short-term financial challenges faced by GTHS organizations is likely to create massive problems for the industry in the long-term once populations across the globe are inoculated from this novel coronavirus. These problems are likely to range from difficulties in recruiting employees due to the negative perception of the industry and rapid population aging, to the reluctance of new workers entering the workforce to join the sector, wage pressure to hold on to existing employees, etc. These issues will also exacerbate the difficulties in recruiting employees’ problem faced by the sector before the Easter Sunday Terrorist attacks and Covid-19 pandemic. Given these long-term implications, it might be pertinent for the sector to invest in upgrading the skills of employees via up-skilling and re-skilling, instead of indulging in large scale employee layoffs to mitigate short-term financial challenges caused by the Covid-19 pandemic.


 

Referencing

Fitch Ratings, (2020). Sri Lankan Consumer Retail, Construction, Hotels Most Affected by Corona Virus. [Online] Available at: https://www.fitchratings.com/research/corporate-finance/sri-lankan-consumer-retail-construction-hotels-most-affected-by-coronavirus-21-04-2020 [Accessed: 14 March 2021].

PWC, (2020). Covid-19 Outbreak: Impact on Sri Lanka and Recommendations. [Online] Available at: https://www.pwc.com/lk/en/assets/COVID-19-Impact-on-Sri-Lanka-PwC.pdf [Accessed: 12 March 2021].

Sri Lankan Tourism Development Authority, (2021). Monthly Tourists Arrivals Report 2020. [Online] Available at: https://sltda.gov.lk/en/monthly-tourist-arrivals-reports-2020 [Accessed: 12 March 2021].

UNWTO, (2020). Impact assessment of Covid-19 outbreak on international tourism. [Online] Available at: https://www.unwto.org/impact-assessment-of-the-covid-19-outbreak-on-international-tourism [Accessed: 14 March 2021].

Comments

  1. ShriMarch 20, 2021 at 10:31 AM

    As the author describes, covid 19 has effected highly to the Sri Lankan Tourism and Hospitality sector. But some time before the corona virus attacked, Easter attack also ruined a major part of Sri Lankan Tourisms industry. According to the author, it declined 72% percent of International tourist arrivals which takes a major share of income to the country. Author describes these matters with lot of details and in very humble manner.
    This is an important topic to talk about and better to find quick solutions as because it matters to a big crowd engaged in tourism industry and as well as the main earning of the country.

    ReplyDelete
  2. Janashi LamahewaMarch 20, 2021 at 10:35 AM

    The author has well explained the COVID-19 impact on Employees of Sri Lankan Tourism.
    It would be more attractive if the blog post aligned into layers starting with the introduction and to end with a conclusion.

    My point of view is that Covid 19 pandemic has revealed the importance of the HRM. Ignoring doomsday scenarios such as considering about complete shut downs of hotels, cost cutting measures, staff layoffs HR departments should apply new HRM strategies and a stage based approach of marketing should be considered.
    According to an on line channel assessment done by Antyra Solutions (Private)Limited on 30th March 2020 There are seven Mapping Possible Stages of the COVID-19 Impact on Tourism Behaviors are found.
    Stage 1: Active Outbreak
    Stage 2: Destination Recovery
    Stage 3: The New Travel Reality
    Stage 4: Source Market Recovery
    Stage 5: Travel Buyer Uncertainty
    Stage 6: Destination Competition
    Stage 7: Return to Normalcy

    ReplyDelete
    Replies
    1. Eroshan AlagaretnamMarch 21, 2021 at 8:36 PM

      According to the author, the Sri Lankan tourism has been affected significantly which is slight higher than the global average of 72%. It has a massive impact to the Sri Lankan economy as the country is fast growing world tourism destination during last 5 years. Based on the recent news, government had provided a rage of concession for he hoteliers and other businesses in the tourism value chain to cope with the challenge of loosing working capital that includes a portion to cover the salary for employees. However, laying off the employees is the first decision made by the hospitality sector employers. I agree with the author, that it will be challenging in remobilizing the labor force when the industry is picking up, as there are lots of distrust that how the sector would treat them back when in another phase of disaster.

      Delete
  3. Ruwan HerathMarch 22, 2021 at 11:12 PM

    As author elaborate covid-19 has massively impact to the hotel industries & it has lead for laying off the employees. Even though the government has introduced some benefits such as loan / lease moratorium employees in hotel industry will not be able to survive, since still industry not perform well as previous.
    As per the nature of the job, most of hotel employees are falling under the category of seasonal workers & they are getting contractual job not the permanent job. However, as author explained, even though they are seasonal workers, they have lost their job due to the impact of global crisis.
    I feel that if author could suggest the way to overcome the situation with referring global perspective, it'll much help to readers.

    ReplyDelete
  4. MADHU MBAApril 30, 2021 at 11:43 PM

    The COVID-19 pandemic started to attack Sri Lanka in the middle part of the tourism season. During this period a larger number of tourists were enjoying in Sri Lanka while some other tourists were already purchased their holidays. The effect of COVID 19 global pandemic to the tourism industry caused the complete shutdown of tourism not only Sri Lanka, but also in the global context. It will not be easy to retain the employees in the tourism and hospitality industry since they expect the job security. Author has well explain about the critical situation.

    ReplyDelete

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