Abstract
COVID-19 is a pandemic that has disrupted the tourism industry worldwide. This study identifies the risk-response strategies of small-scale boutique hotels to analyse business readiness in the face of COVID-19. A similar study has not been previously conducted in the Sri Lankan context. The research was conducted on small-scale boutique hotels in Sri Lanka using the convenience sampling method whereby four boutique hotels were selected from the Southern province. The gathered data were analysed using thematic analysis and the key variables identified were the managers’ perception and resource availability. The study found that 1) the boutique hotels were mainly dependent on foreign customers and thus faced heavy losses and 2) the strategy for continuing their business operations was based on downsizing, pay cuts, and targeting local customers through promotional offers on social media. The findings also revealed that efforts to attract local tourism were not successful. The lack of a contingency plan in the case of disruption of foreign tourism was evident. Based on the analysis, the risk-response strategies used for recurring shocks (e.g. floods, fire, etc.) are inadequate to face a crisis that has a long and unpredictable impact in nature. It was further evident that the hotel owners did not understand how to evaluate the risks of their business apart from what they have been facing continuously over the years.
Highlights
This study focuses on small-scale boutique hotels in Sri Lanka
The findings suggest organizations operating in the tourism industry lack knowledge in crisis management
The research focuses on evaluating the crisis readiness of small-scale boutique hotels towards COVID-19
Summary
An organization is an interconnected system of internal and external parties comprised of customers, suppliers, and employees. A shock wave causes this system to disrupt, misaligning the supply and demand [1] which could result in downsizing and even threatening the survival of the organization [2],[3]. A crisis can impact multiple levels – e.g. global, country, economy, industry, company etc. The COVID-19 pandemic has produced significant local and global impacts [5]. The tourism industry is an important sector in the global economy with an annual average GDP growth of 8% and 10% employment [6]. Due to the drop in tourist arrival in 2020 compared to 2019, a loss between 290 million to 440 million resulted in a single year [7]. COVID-19 is the worst crisis the tourism industry has faced over the years [7]
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