СУЧАСНИЙ СТАН, ІНВЕСТИЦІЙНА ПРИВАБЛИВІСТЬ ТА ПЕРСПЕКТИВИ ПОДАЛЬШОГО РОЗВИТКУ ГОТЕЛЬНОГО БІЗНЕСУ В УКРАЇНІ

Relevance of the research. The article presents the results of the study at the state and prospects of the hotel and restaurant business in Ukraine in the current political and socioeconomic conditions. The subject of the study is the dynamics of hotel and restaurant business development in Ukraine and its regions. The aim of the article is, firstly, to determine the main factors influencing the efficiency of the functioning of hotels and restaurants, and secondly, the formulation of practical recommendations on this basis, aimed at the dynamic development in the industry. Methodology of investigation consists in the elaboration of legislation in Ukraine, scientific publications on the hotels and restaurants activities, data of state statistics, expert assessments of managers of enterprises of the hospitality industry. The main results of the article are the essence and mechanism of the influence in various factors on the development of the domestic hotel and restaurant business are revealed. Conclusions . The research has shown that a significant reduction in solvent demand for hotel and restaurant services in the current crisis is a major challenge for the hospitality industry. The regional features of the hotel and restaurant activity are analyzed. The conditions for the dynamic growth of the hospitality sector, in particular the growth of real incomes, business activity, and the restoration of tourist flows, are determined. An important factor in the development of hotel and restaurant business is the deepening of the international integration in Ukraine with the countries of the European Union. The article proposes the creation of a mechanism for effective partnership between enterprises of the hospitality industry, leading universities and the state (local governments), which will facilitate the introduction of innovations, attract investments in the development of the industry, the creation of new jobs in hotels and restaurants.

CHALLENGES AND PARADIGM OF NATIONAL AND INTERNATIONAL SECURITY OF THE XXI CENTURY: ECONOMIC AND TECHNOGENIC DISCOURSE The object of the study is the economic security of the enterprises of the hotel and restaurant business in Ukraine. To achieve certain goals, methods of theoretical generalization, analysis and synthesis, logical generalization, analogies, comparison, grouping, the method of taxonomic analysis, and system analysis were used. Analyzed the current state of development of hotel and restaurant enterprises in Ukraine. The application of the taxonomy method for diagnosing the economic security of hotel and restaurant enterprises is substantiated. The indicators of economic security of enterprises in the hotel and restaurant industry are identified, grouped in key areas: production, market, intellectual and personnel, investment, material and technical and financial. The interpretation of the values of the integral taxonomic indicator of the economic security of hotel and restaurant enterprises in Ukraine is substantiated. In accordance with the value of the integral indicator, a division into five levels of economic security of enterprises is proposed, which correspond to certain strategies and management decisions for their implementation. An integral indicator of the economic security of hotel and restaurant enterprises was calculated using the taxonomy method for 2015–2020. Based on the results of the calculations, a conclusion was made about the uneven development of the hotel and restaurant industry in Ukraine and the existing problems in ensuring the economic security of domestic hotel and restaurant enterprises. The strategy for ensuring the economic security of hotel and restaurant enterprises is substantiated and managerial decisions for its implementation for the future period are proposed. The applied nature of the proposed methodology is justified by its practical application according to the actual data of the enterprises of the hotel and restaurant business in Ukraine for 2015–2020. ------------------------------------------------------------------------------------------------------------------ How to Cite: Nikolaichuk, O., Gorina, G., Pryimak, N., Romanykha, O.; Chernega, O., Bocharova, Yu. (Eds.) (2022). Strategies for ensuring the economic security of the hotel and restaurant business. Challenges and paradigm of national and international security of the XXI century: economic and technogenic discourse. Kharkiv: РС ТЕСHNOLOGY СЕNTЕR, 149-169. doi: 10.15587/978-617-7319-59-6.ch8

Introduction . Hotel-restaurant economy is one of the main factors and an important component of tourist infrastructure. This is due to the fact that no tourist trip is possible without hotel service and food. It is an integral part of not only a tourist product but also everyday life. The hotel and restaurant industry is rapidly developing and has the opportunity to become one of the most important sectors of tourism activity . Purpose . The purpose of the article is to study the trends of the enterprises of hotel and restaurant industry and tourist establishments. Methods. Method of theoretical analysis, monographic method, method of generalization, abstract-logical method are used. Results. Contemporary trends in the restaurant and tourism business, development of integration forms of organization of activity of enterprises of hotel and restaurant economy in Ukraine on the network basis of well-known western corporations are considered. Article determined the marketing determinants of hotel and restaurant networks development and the system of management of enterprises of hotel and restaurant business. The efficiency of the process of organization and management of enterprises on the basis of software and hardware is substantiated. Originality. The tendencies of development of tourist establishments and enterprises of hotel and restaurant economy are explored. Modern trends in restaurant and tourist business are presented. The development of integration forms of organization of activity of enterprises of hotel and restaurant economy in Ukraine on the basis of networking of well-known western corporations is considered. The efficiency of the process of organization and management of enterprises on the basis of modern information technology, using a set of methods and means of realization of operations of collection, transmission, accumulation and processing of information on the basis of hardware and software support is substantiated. Conclusion . Creation of a highly effective hotel and restaurant economy plays an important role as one of the priority directions of the structural reorganization of the tourism industry and the economy of the state. In order to promote the adequacy of managerial decisions in relation to the development and implementation of the company’s restaurant and hotel industry strategy, as well as increase the awareness of employees, it is necessary to know the tendencies of the development of enterprises of the hotel and restaurant industry in general, to understand the processes taking place in the industry today. Taking into account international trends is an important step towards a highly developed competitive hotel and restaurant business as a component of the tourism industry in Ukraine.

Currently in our country there is an intensive development of hotel and restaurant business. This process affects almost everyone, as consumers of these services are largely all residents and guests of the city and country. Modern life is impossible without rest in a cozy cafe and accommodation in a comfortable hotel. Employees of many companies and organizations use the services of restaurants, cafes, cafeterias during the working day, as well as hotel services when going on business trips or on vacation. In recent years, more and more people choose as a venue for banquets on the occasion of any solemn events restaurants of different levels and classes, as well as hotels to accommodate guests invited from other cities. Now everywhere there are new enterprises in this field, different in size and type of services provided. The development of the hotel and restaurant business is also important for the creation and modernization of the tourist infrastructure of the region. According to most researchers, the main factor hindering the development of inbound tourism in Ukraine is the lack of tourism and hospitality industry that meets modern international standards. The article investigates that currently in our country there is an intensive development of hotel and restaurant business. This process affects almost everyone, as consumers of these services are largely all residents and guests of the city and country. Modern life is impossible without rest in a cozy cafe and accommodation in a comfortable hotel. Employees of many companies and organizations use the services of restaurants, cafes, cafeterias during the working day, as well as hotel services when going on business trips or on vacation. In recent years, more and more people choose as a venue for banquets on the occasion of any solemn events restaurants of different levels and classes, as well as hotels to accommodate guests invited from other cities. Now everywhere there are new enterprises in this field, different in size and type of services provided. The development of the hotel and restaurant business is also important for the creation and modernization of the tourist infrastructure of the region. According to most researchers, the main factor hindering the development of inbound tourism in Ukraine is the lack of tourism and hospitality industry that meets modern international standards.

Introduction. The hotel and restaurant business is one of the most profitable businesses in the world and meets the basic needs of the population in food and housing. However, research shows that today it is one of the most sensitive to the economic situation and the global pandemic. Therefore, research in the field of hotel and restaurant business as any country as a whole and its individual region is relevant. The purpose of the article is to analyze the current state of the hotel and restaurant business in the Poltava region and determine the strategic directions of its further development. Research methods are analysis and systematization of the state and further development of the hotel and restaurant business of Poltava region. Results. The current state and trends of hotel and restaurant business development in Poltava region are analyzed. It is established that the volume of implemented services for temporary accommodation and catering for 2017-2019 tends to increase for all categories of consumers. The volume of sold services for the first three quarters of 2020 is analyzed; there are uneven changes, first the volume of services decreases, and then increases again. The characteristics of the structure of implemented services for temporary accommodation and catering for 2017-2019 are given. It is established that the largest share in this structure are services provided to the population - 77%. The dynamics of the number of accommodation facilities in 2015-2017 was studied. There is a decrease in the number of accommodation facilities from 11% to 23%. Conclusions . The volume of sales of services for temporary accommodation and catering for enterprises of hotel and restaurant business of Poltava region for 2016-2019 tends to increase. The number of hotel and restaurant businesses is declining due to inefficient management methods and slow updating of the material and technical base. The analysis of the state of development of the hotel and restaurant business of Poltava region will be an effective tool for developing strategic directions of development and effective operation of accommodation facilities. The practical significance of the obtained results lies in the development of methodological recommendations for the formation of strategic development of hotel and restaurant business enterprises .

The article explores the global trends in the development of tourism and hotel and restaurant business, provides insights to the basic franchising concept and offers a definition of the term franchising in the hotel and restaurant business. A statistical analysis of profitability indicators of the global tourism market has been performed. The results of the world and domestic hotel and restaurant industry survey have validated positive prospects for the implementation of franchising in the hotel and restaurant business in Ukraine. The research findings demonstrate qualitative and quantitative profitability indicators for the franchising companies operating in the global developed markets, in particular, the franchising networks performances in the hotel and restaurant sectors in Europe and the US have been investigated. The world top franchise business leaders have been identified. The study results have verified a strong correlation between high profitability in the hotel and restaurant industry and the number of franchisors engaged in this sector. An overview of the specifics of franchising relations legal regulation across countries is provided along with revealing the major challenges in the national legislation domain as to the basic terminology of legal regulation of franchising as a whole. A special emphasis is placed on mutual benefits the franchise system provides for a franchisor and a franchisee. The reasons behind the slowing down of the franchising process implementation practices in the domestic hotel and restaurant business settings are revealed.

The condition of the restaurant business in Ukraine has been studied, and this study showed that at present, many enterprises of the restaurant business cannot stand competition and close down in the context of crisis, high level of inflation, drop of income level of the population. However, the restaurant business is one of the most widespread types of small businesses both in Ukraine and in the world, so the basic directions of its improvement are specified in the article. It is proved that in spite of the large number of scientific papers and publications, the problematic issues of cost accounting at the enterprises of restaurant economy remain unsolved to the full extent. We investigated the role and place of distribution costs and production costs in the circulation of capital and defined their substantive content. It is proved that the activities and internal characteristics of any enterprise better reveal in the functions performed in it that requires a certain amount of time and resource expenses. Therefore, there is a direct link between the cost values for the realization of its common functions, size of the enterprise, features of its activity, sectoral affiliation, that answers the question about the sources of expenses. We suggested a functional and cost-based structure of restaurant business enterprises, recommended classification of expenditure of catering business enterprises, depending on the types of economic activity and enterprise management objectives, which is the basis for the introduction of functional reporting of expenses enterprises restaurant business and calculation of production costs at restaurant business enterprises, and which is also necessary for organization of managerial accounting.

Topicality. The hospitality industry plays a significant role in solving the problems of bringing the national economy out of the crisis, contributing to its structural transformation, which is of exceptional importance for Ukraine nowadays. Despite the huge recreational potential, the Ukrainian market of hotel and restaurant services is significantly lower than the world market of the hospitality industry in terms of economic efficiency. The main problems of the hospitality industry development are insufficient amounts of investment in renovation and building of new establishments, an inadequately developed market for the provision of hospitality services, imperfect infrastructure, technological backwardness of the industry, low solvency of the population, and the use of environmentally hazardous raw materials. It is no coincidence that improvement of modern infrastructure and introduction of modern technologies in the field of hospitality is recognized as one of the priority areas of the national economy development. The martial law declaration has negatively affected the activity of hotel and restaurant business establishments in Ukraine. All this determines the indisputable relevance of studying main trends and problems of the development of Ukrainian hospitality industry in today’s conditions. The aim of the article and research methods. The aim of the article is to analyze the current state and peculiarities of the hotel industry development in Ukraine. When conducting the research, general scientific research methods were used: comparison, generalization, analysis, synthesis and systematization, induction and deduction, tabular and graphic method, as well as scientific and theoretical developments of domestic and foreign scientists, informational materials of statistical and reference publications. Results. The article analyzed the current state of the hospitality industry in Ukraine. The practical aspects of hotel and restaurant business functioning were disclosed. It was established that the military aggression of the enemy has a negative effect on the dynamics of the development and functioning of hotel and restaurant enterprises. A significant number of them are functional or have been partially repurposed. The dynamics of temporary accommodation and catering organization enterprises were analyzed as the main criterion for the development of hotel and restaurant services. It was established that a significant decrease of enterprises and a reduction in the number of employed workers in the hospitality industry occured in 2021. It was noted that the consumer price index in 2022 increased significantly due to the raising in production expenses of the hotel and restaurant business from 103.7 to 122.5 %. In 2022, CPI growth was 100.9% in January, and 103.7% in December. So, the main reasons for the increase of CPI are the rapid growth of the dollar currency and consumer prices, as well as the devaluation of the Ukrainian currency. The financial activity of hotel and restaurant business enterprises was characterized. In 2020, temporary accommodation and catering organization establishments suffered a loss of UAH 6.500 million. However, in 2021, a slight increase in profit could be observed, as UAH 7.003 million. Thus, in 2021, a slight increase in profit could be noticed – UAH 7.003 million. The profitability of enterprises in 2021 was 9 %. This indicates the adaptation of the hospitality industry as a promising direction. Conclusions and discussion. So, in the course of the study, it was established that the hospitality industry is currently in unfavorable conditions, which are caused by the military aggression, which negatively affects the dynamics of the hotel and restaurant business development. In 2021, compared to 2020, there was a slight improvement in the financial result of the business, in accordance with the increase in income and profitability of temporary accommodation and catering organization establishments. However, with the aim of effective development and functioning of the hospitality industry, programs and projects of supporting the hotel and restaurant business are being implemented in the country with the assistance of international organizations.

Relevance. Problem statement. European integration implies the development of international tourism flows, which will ensure an increase in demand for hotel and restaurant services. This can contribute to the development of infrastructure, improving the level of service, and creating new job opportunities. Furthermore, in the process of European integration, the standards of the hotel and restaurant business in Ukraine require adaptation to the requirements of European norms and standards. This includes the implementation of appropriate standards for food safety and quality, hygiene, energy efficiency, and more. Additionally, European integration involves free movement of capital and openness to foreign investment, which can help attract investment in the hotel and restaurant business and increase its competitiveness. Therefore, it can be argued that the topic of the hotel and restaurant business is highly relevant in the process of European integration, as this sector is an important factor in the development of tourism and the economy as a whole. Introduction to the EU provides Ukrainian hotels and restaurants with the opportunity to attract new customers from EU countries. The increase in tourist flow can lead to a growing demand for hotel and restaurant services. European standards in the hospitality industry are higher than in some other countries. Ukrainian hotels and restaurants must meet these standards to be competitive on an international level. This requires improvements in service, food quality, safety, and infrastructure. With the increase of foreign investments in the hotel and restaurant industry in Ukraine, new competitors emerge. This stimulates Ukrainian businesses in this sector to constantly enhance their services and embrace innovative solutions. ECO N O MI CS AN D M ANA G EM EN T H OSP I TAL I TY ENTERPRISES Issue I (89), 2023 69 Research objective. The objective of the study is to determine the conceptual foundations of the hotel and restaurant business. Methodology. The tasks outlined in the article were accomplished using general scientific research methods, namely analysis, systematization, and generalization. The research is based on logical-dialectical methods of scientific cognition, methods of systemic analysis, as well as specific methods, including methods of analysis and synthesis. Results. The article explores the hotel and restaurant business in Ukraine, highlighting that it is developing at a slow pace despite aiming to align with European trends. The positive and negative consequences of the integration aspect of the hotel and restaurant business are addressed. The aspects that may be crucial for the hotel and restaurant business after EU accession are examined. Practical significance. Solutions to the issues of sluggish development in the hotel and restaurant business are proposed. It is substantiated that the development of the hotel and restaurant business in Ukraine is essential for Eurointegration and ensuring sustainable economic growth in the country. The article provides suggestions and ideas for the development of the hotel and restaurant business in Ukraine. Prospects for further research. Further research envisages the utilization of all reserves to enhance the quality of service and competitiveness of hotel and restaurant complexes in Ukraine by implementing positive foreign experience in the development of hospitality enterprises.

BACKGROUND AND OBJECTIVES. In Ukraine, not all issues relating to modern theoretical, methodological and applied foundations of enhancing the development of hotel and restaurant business are covered. There is a need for in-depth scientific research of theoretical aspects of the formation of methods of organizational and financial resource provision of tourism development at the national and regional levels, the definition of priorities and determination of ways to improve the efficiency of management of the complex use of the rich recreational and tourist potential of Ukraine.METHODS. Methodology of scientific research are general scientific and special research methods: dialectical method of research of processes and phenomena in their interrelation and development, system-structural analysis (when studying the conceptual foundations and systematization of methodical approaches to management of development of hotel-restaurant business); methods of group analysis and statistical approaches, economic-statistical methods, comparison (when analyzing social and economic preconditions, opportunities and motives of development of hotel-restaurant business), methods of analysis of the economic and social situation (when analyzing social and economic preconditions, opportunities and motives of development of hotel-restaurant business).FINDINGS. The elements of functional support for the development of domestic hotel and restaurant business are substantiated.CONCLUSION. The study of domestic hotel and restaurant business, in particular the regional market of tourist services, is based on the assessment of the environment of market activity. It involves the use of a comprehensive approach to the application of theoretical and applied foundations of sectoral and territorial analysis and aims to form the leading levers of development of hotel and restaurant business.

Topicality. In the current realities of Covid-19 pandemic and martial law in Ukraine, every enterprise must focus on the processes transformation of provision and development, which allow to quickly respond to their activity, challenges and modifications in order to be attractive for investment. The aim of this article is a comprehensive assessment of the investment attractiveness of hotel, restaurant and tourism businesses based on the usage of the offered three-stage system of financial indicators. Research methods. The research uses common scientific and empirical techniques found on the systematic approach: abstract-logical, grouping, comparison, graphic, coefficient, modelling, analysis and synthesis, formalisation, generalisation ones. Results. The system of comprehensive assessment of the investment attractiveness of hotel, restaurant and tourist business enterprises has been substantiated, which involves the use of key financial indicators that allow determining the level of liquidity and profitability of activities, as well as the level of financial stability and profitability of financial resources. The relationship between certain groups of indicators made it possible to construct identification matrices of the state of investment attractiveness of current activities, and the state of general investment attractiveness of enterprises, as well as a nine-quadrant zoning matrix of the general state of enterprise investment attractiveness. Approbation of the offered evaluation system, based on official statistical data, made it possible to analyse the dynamics of the state of investment attractiveness of hotel, restaurant and tourism businesses from the standpoint of internal financial threats for the period 2013–2021. Conclusions and discussions. The practical use of the offered three-level evaluation system proves that it is a convenient, simple, clear and effective tool for diagnosing the level and the state of the enterprise investment attractiveness. The use of the offered approach can become an effective mechanism for managing the current activities of hotel, restaurant and tourism businesses, and an informative toolkit of factor analysis in the process of managing their investment attractiveness from the standpoint of internal financial threats. The scientific novelty of obtained research results lies in the substantiation and approval of modern tools for comprehensive assessment of the investment attractiveness of hotel, restaurant and tourism enterprises from the standpoint of internal financial threats, which allows for effective management of it in the current period, and can also become the basis for forming strategic directions of financial development and forecasting the level of nvestment attractiveness for the prospective period.

The formation of market relations in the Ukrainian economy on the model of sustainable development necessitates the improvement of marketing, its ability to counteract the challenges of the negative impact of a changing market environment, where imperfections in the market conditions of hotel and restaurant services, excessive hotel and restaurant supply against the background of a decline in consumer demand for this type of service, and the lack of an effective organizational and economic mechanism for the development of the hotel and restaurant business at the regional level remain urgent. At the same time, the intensification of competition in the field of tourism and hospitality in the modern period necessitates the introduction by business entities of innovative marketing strategies adapted to industry micro- and macroeconomic risks and current problems of development of the Ukrainian hotel and restaurant business, etc. The study aims to generalize and develop theoretical and methodological foundations and practical recommendations for improving the methods and tools for implementing effective marketing strategies of enterprises in the hotel and restaurant business. It is determined that in a highly competitive environment, effective marketing plays a crucial role in the tourism and hospitality industry. The expediency of using the concept of “adaptive marketing strategy” as a way to achieve the strategic marketing goals of enterprise through the implementation of prompt and effective management decisions to ensure the necessary level of viability of enterprise and maximum satisfaction of consumer needs is substantiated, and a model of the basic determinants of forming an adaptive marketing strategy for enterprises in the hotel and restaurant industry (HRI) is proposed. It has been determined that several specific features and industry-specific conditions are necessary for developing the modern hotel and restaurant industry, and the need to introduce marketing activities that correspond to more innovative and evolutionary modified models of “5P… 7P”. Generalizing several existing theoretical and methodological approaches will allow us to highlight important accents, which, if considered at the development stage, will allow us to succeed in the final stage of its implementation: 1. Assessment of the value of profit growth. 2. Features of positioning the hotel/restaurant service/product on the target consumer market. 3. Increase in market share and sales volume. 4. Development of new segments of the consumer market and entry into new markets. 5. Marketing pricing. The methods for analyzing the adaptive marketing strategy of enterprises and the latest trends in the development of the hotel and restaurant business on a marketing basis are determined. It is proven that the implementation of a comprehensive adaptive marketing strategy for the hotel and restaurant business, focused on the consumer in the system of increasing customer focus, leads to long-term cooperation with the consumer through the offer of innovative services/products, additional services, competitive prices with high-quality 100% service. Keywords: marketing, adaptive marketing strategy, hotel and restaurant business, marketing tools, competitive advantages, hotel and restaurant service/product, marketing management system.

The purpose of the article is to determine directions for the use of forecasting and modeling methods to optimize management of the development of the hotel and restaurant business. Types and methods of forecasting are listed. Classifications of forecasting methods were studied and their main groups were listed. The advantages and disadvantages of forecasting and modeling methods that are most commonly used in practice are analyzed. It was determined that the advantage of expert forecasting methods is relative simplicity for any situations, including in conditions of incomplete information. It is noted that simple methods of extrapolation can be used at the initial stage of forecasting to determine trends in changes in indicators. Complex methods of extrapolation can be used in the development of short-term forecasts. Smoothing methods are auxiliary in forecasting, which are used in combination with the main ones. It is noted that modeling methods can be used to determine the influence of various factors on the development of economic processes in the hotel and restaurant business. The advantages and disadvantages of the method of the annual average of the index are analyzed. The content of the forecasting methods themselves significantly depend on the terms of the forecasts. It was determined that when forecasting the development of hotel and restaurant business enterprises, it is most appropriate to use combined methods that combine economic-mathematical modeling and development scenarios inherent in intuitive methods. Recommendations for the use of cluster analysis of hotel and restaurant business enterprises are presented and the results of this analysis are determined. The stages of cluster analysis of a group of hotels and its results are described. It is noted that the possibilities of practical use of this or that forecasting method are determined by the purpose of the forecasting results, the features of the object, and the availability of the necessary information. Keywords: forecasting methods, modeling methods, economic and mathematical analysis, cluster analysis.

Topicality. The relevance of the selected study grounds on the fact that recent global events such as the armed aggression of the russian federation against Ukraine in 2022 and the COVID-19 pandemic have made significant changes to the usual rhythm of life of everyone, regardless of the country of residence. These circumstances form the basis for studying and analysing the development of hotel and restaurant establishments in the face of global threats with the further aim of creating a comprehensive system of sustainable development, which, in turn, will become an important direction in ensuring the national economy’s development. The aim and methods. The aim of the study is to analyse the current situation in the formation of the concept of development and modernisation of competitive hotel and restaurant establishments in the face of global threats. The research methods are based on the analysis of specialised literature on the research problem, covering the basics of the Concept of Development, generalisation and synthesis of the studied material for further work on the problem, data collection and statistical groupings, mathematical calculations, construction of graphic materials, application of economic research methods, systematisation of the obtained material, implementation of research and experimental work. Results. The article studies the activities of the hotel and restaurant industry in constrained conditions based on domestic and foreign experience; describes the concepts of development of the service sector from classical interpretations to modern challenges; describes the organisation of the hotel and restaurant business based on the fundamental principles of the military sphere, and forms a concept of development and modernisation of competitive hotel and restaurant establishments in the context of global threats. Conclusions and discussion. The scientific novelty of the article grounds on the development of scientific and practical recommendations aimed at ensuring the sustainable development of hotel and restaurant establishments in the context of global threats. The practical significance lies in the fact that the scientific and practical provisions of this research can be implemented in the hospitality industry in order to increase resilience in the face of global threats.

The article analyzes the impact of the COVID-19 pandemic on the functioning of small and medium-sized businesses in the hotel and restaurant industry. The hotel and restaurant business in Ukraine suffers the most from the restrictions imposed due to the spread of the virus. The established restrictions have both direct and indirect impact on the functioning of small and medium-sized businesses in the hotel and restaurant industry. It is shown that due to the introduced restrictions, the share of the hotel and restaurant business sector in the gross domestic product of Ukraine has significantly decreased, employment in this sector has decreased. During the quarantine restrictions, the hotel and restaurant business faced a number of problems: low access to finance; loss of access to markets; complex regulation and tax pressure. To overcome the problems facing the small and medium business sector in the hotel and restaurant sector, it is necessary to maintain business activity and jobs; increase institutional capacity to operate in markets. Quarantine measures have created a significant negative impact on the work of the small and medium business sector, which may be exacerbated in the absence of government intervention. Quarantine measures have created a significant negative impact on the work of SMEs, which may be exacerbated in the absence of government intervention. A significant problem for the hotel and restaurant business is the rapid restructuring in accordance with the new social standards in a pandemic, which will allow to work and make a profit, as well as to protect their customers from the risk of infection and minimize the threat of COVID-19. The article outlines a number of major problems faced by the hotel and restaurant business during quarantine restrictions and tasks that need to be addressed to overcome them.