IMPACTS OF COVID-19 ON TOURISM AND

HOSPITALITY INDUSTRY
Nur Adila Shahira binti Zanalbidin Erme Razme Asyilah binti Ahmad Sheliza Sahari
Faculty of Computer Science and Termeze Faculty of Computer Science and
Mathematics Faculty of Computer Science and Mathematics
UiTM Terengganu Branch, Campus of Mathematics UiTM Terengganu Branch, Campus of
Kuala Terengganu UiTM Terengganu Branch, Campus of Kuala Terengganu
Kuala Terengganu, Terengganu, Kuala Terengganu Kuala Terengganu, Terengganu,
Malaysia Kuala Terengganu, Terengganu, Malaysia
2018238494@student.uitm.edu.my Malaysia shelizasahari369@gmail.com
erme7198@gmail.com

Zeti Darleena Eri

Faculty of Computer Science and
Mathematics
UiTM Terengganu Branch, Campus of
Kuala Terengganu
Kuala Terengganu, Terengganu,
Malaysia
zetidarleena76@gmail.com

A. INTRODUCTION prohibited. The tourism and hospitality industries have

Coronavirus disease 2019 (COVID-19) is an infectious
disease caused by coronavirus 2 that causes severe acute
respiratory syndrome (SARS-CoV-2) [1]. In November 2019,
the first case of COVID-19 was detected in China. COVID-19
is a newly discovered virus that produces a contagious
sickness. This virus spread quickly. The pandemic has
progressed to the level of a worldwide public health
emergency. As a result of the virus's severity, the World
Health Organization (WHO) proclaimed the COVID-19
outbreak to be a public health emergency of international
concern on January 30, 2020 [2].
The tourism and hospitality industries are services sectors
that play the important role in enhancing the economy of
various countries by stunning tourism sites, creating jobs and
lowering unemployment rates. The tourism industry involves
business tours and holiday tours whether domestic or
international. The hospitality industry requires transportation
services, food and beverages services (F& B), and lodging
services like hotels. The hospitality and tourism industry are
an important economy-boosting sector for Malaysia. It is
because this industry has seen incredible growth in the tourism
sector and it can get a lot of profit from tourists quickly.
The impact of Covid-19 on the hospitality and tourism
industry demonstrates the direct and indirect economic
consequences and damages related to COVID-19. As a result
of the worldwide spread of COVID-19, the industry is today
facing one of its most serious operational, economic, and
financial difficulties. The COVID-19 crisis will have a
significant impact on the tourism and hospitality industry,
which has already been subjected to low margins,
unsustainable financial outcomes, and disruptions as new
technology-driven competitors enter conventional market
segments. Because of the pandemic's fast spread, most
countries announced lockdown, and travel was also
suffered significantly as a result of the economy's downfall.
B. SUMMARY
The research revealed that the Covid-19 outbreak has had
both positive and negative on the tourism and hospitality
industry. The people need to undergo new norms to break the
chain of the disease. The positive impact on the tourism and
hospitality industry is the adoption of new technologies in the
hotel industry and the tourism sector boosts the country’s
economy. The adoption of new technologies in the hotel
industry is blockchain technology and artificial intelligence
(AI). For blockchain technology, it has been used in Malaysia
in the improvement of MySejahtera which can display the
digital vaccine certificate in the application. Meanwhile, AI
technology like robots is used in the hotel industry to reduce
the burden on hotel staff. The opening of the tourism sector
during this pandemic can boost the national economy as it is
the biggest contribution to the national economy. Next, the
negative impact of Covid 19 on the tourism and hospitality
industry is the closure of airlines, a decrease in the GDP of
the hotel industry, and the loss of employees in the tourism
and hospitality industry. The closure of airlines is because of
travel restrictions. Then, the decrease in GDP was due to the
cancellation of tourist visits when it was found that Covid-19
cases were on the rise. The loss of employees in this industry
is due to employees have been laid off.
C. MAIN BODY
1) Positive Impacts of Covid 19 on Tourism and Hospitality
Industry
i. Adoption of new technologies in the hotel industry
The impact of the Covid-19 pandemic has been severe in
Malaysia, with many establishments that were around for
decades having to close their doors. This pandemic, on the
other hand, has hastened the use of innovative technologies
in the hotel industry. The rise of smart capacity and services
in the hospitality industry has become a necessity in today's
environment. The contact-less nature of coronavirus has
necessitated the introduction of new technology trends in
hospitality [3]. The use of blockchain technology can help to
improve guest experiences. Blockchain is a distributed ledger
that duplicates and distributes all previous transactions
among all computer systems in the network [4]. In addition,
data is secure, immutable, distributed, timestamped,
unanimous, anonymous, and configurable to fit each
enterprise using this technology [4]. Although blockchain has
been around for a while, its most popular use case is in
cryptocurrencies and Defi. This technology eliminates the
need for intermediaries and allows guests to book their rooms
directly.
TUI, situated in the United Kingdom, is an example of a
company that employs the technology. In 2017, the company
switched its hotel rooms on a private blockchain. TUI's
BedSwap project allows hotels with excess inventory or room
availability to update the blockchain, allowing authorized
parties to see where and how many hotel rooms are available
at any one time [3]. Although this technology is not applied
in hotels in Malaysia, it has been used in the MySejahtera
system which allows the application to display vaccine
certificates [5]. The digital vaccination certificates issued by
Malaysia and Singapore are secured by blockchain
technology and include a traceability feature that identifies
the specific batch of the vaccine vial used for inoculation [5].
With this digital vaccine certificate, it is easier for the hotel
because they only need to check the certificate on the mobile
phone before the customer stays at their hotel.
Besides that, some countries have used Artificial
Intelligence (AI) technologies such as robots to facilitate their
daily work. Especially in the hotel industry to free up the time
of human staff and help personalize a guest's stay. Artificial
intelligence is becoming increasingly significant in the hotel
industry, owing to its capacity to do traditionally human tasks
at any time of day. This might save hoteliers a lot of money,
minimize human mistakes, and allow them to provide better
service [6]. Robotic machines, while not as advanced as
humans, it performs tasks in a variety of industries, including
hospitality. During the pandemic, robotic hotel workers
played a critical role in limiting person-to-person contact. KT
Corporation, a South Korean telecommunications
corporation, has introduced its second-generation GiGA
Genie hotel robot, which is aimed to aid improve service
delivery [7]. The Novotel Ambassador Dongdaemun Hotels
& Residences is already using the "N Bot" robot. It circulates
through hotel rooms, providing amenities such as fresh
towels and water bottles, as well as other amenities to hotel
guests.
ii. The tourism sector boosts the country’s economy
The tourism industry makes a significant contribution to the
national economy. Since the conversion of the Covid19
pandemic in March 2020, the closure of some sectors in the
country including the tourism sector has caused the country's
economic rate to decline. However, starting September 2021,
the opening of the domestic tourism sector in phases has
given light to the industry players. The government has
decided to reopen Langkawi Island as a 'testing ground'
project to revitalize an industry that had long been affected
by the COVID-19 pandemic due to the island geography,
which was isolated from other places [8]. Langkawi Island
has its strengths such as having a network of domestic and
international flights, as well as having a variety of
accommodation facilities for various tourist segments.
Therefore, more locals are seizing this opportunity to take a
vacation with their family after being under the restricted
movement control order by the government which has been
applied since the pandemic 2019. This news has brought the
tourism sector back to normal. Before the opening of the
tourism sector, Bank Negara Malaysia (BNM) and the
Department of Statistics Malaysia (DOSM) had announced
that Gross Domestic Product (GDP) increased by 16.1%
year-on-year in the second quarter of 2021 from April to Jun
[9]. This indicates a continued recovery trend compared to a
decline of 3.4% in the fourth quarter of 2020 from October to
December and to know the GDP in the fourth quarter which
is after reopening the tourism sector, we must wait for the end
of the year [9]. So, with the opening of the tourism sector, the
Malaysian economy, which is getting worse since the
pandemic, is slowly to have a recovery.
2) Negative Impacts of Covid 19 on Tourism and
Hospitality Industry
i. Closure of Airlines
The impact of Covid-19 on the airline industry was severe
since there was a full restriction on travel and all airlines were
closed for a longer length of time. This has a serious impact
on any airline industry. It includes the whole global airline
business, including Malaysian Airlines and the aircraft
industry. The airlines industry is even on the verge of going
bankrupt. There are travel prohibitions in place and there is
no demand from people who wish to travel. Malaysia's three
major airlines are Air Asia, Malindo Air, and Malaysian
Airlines. They don't even have enough money to stay in
business. As a result, they want to minimize costs by reducing
their wages by 10% to 100% [10]. They even think of forced
retirements from the service and unpaid leaves for an
unknown period. These airlines and the aircraft industry have
faced a massive downfall and suffering from the drastic
impact on the revenue and even profit with a greater
bankruptcy risk. Not only that, only around 50 flights are
available throughout the day due to restrictions [2]. They
have even requested that the government assist airlines and
the aircraft industry in this crucial situation caused by the
continuing covid-19 pandemic. Between 2019 and 2020,
there are a 60% decline in worldwide seat capacity and a
2,699 million decline in passenger numbers. The airlines
reported a $371 billion loss in gross passenger operating
revenue [11]. The cost of airlines has increased as a result of
travel restrictions, including charges for disinfection and
temperature control.
ii. The decrease in GDP of Hotel Industry tourism industry. The accommodation for tourists, food, and
beverage serving activities, and other reservation services
Covid-19 has a huge impact on the hotel industry. Their operations, as well as cultural activities, are all jobs of the
contribution to the economy's growth has unexpectedly tourism industry. COVID-19 has caused havoc on the
decreased, resulting in a drop in GDP. The GDP was region's air passenger transport business, with international
impacted by 0.8 to 1.2%, ranging from RM 10.8 billion to tourists canceling planned journeys. Airlines have taken
RM 17.3 billion [10]. The government canceled all tour unprecedented steps, including putting employees on paid or
packages (2020), which had a significant impact on tourism, unpaid leave, cutting salaries, and firing off people. 4% of
and the hotel industry. The cancellation of tourist tours had a hotel workers in Malaysia have been laid off with many
significant impact on the hotel industry since all tourists others taking unpaid leave and receiving salary cuts [12]. In
canceled their hotel reservations. Tourists canceled 170,084 the Cook Islands, 200 employees were put off from three
room bookings from January to March before the lockdown resorts when the companies lack incoming customers. In
period, resulting in a considerable revenue drop of Samoa, 50 hotels were temporarily shuttered, and 500 staff
RM68,190,364 because of the rising cases of covid-19 [2]. were laid off. According to the Fiji Hotel and Tourism
According to the Malaysia Association of Hotels, the hotel Association, 279 hotels and resorts have shuttered since the
sector in Malaysia has lost over RM 560.72 million as a result pandemic, with 25,000 workers losing their jobs [12]. The
of the pandemic and the Movement Control Order following data comes from the Malaysian Hotel Association,
implemented across the country to prevent the disease's and it defines the impact on hotel workers in each region:
spread [10]. The cancellations of hotel bookings are
anticipated to continue until MCO is over. As a result of Table 2 Impact on hotel workers in each region
MCO, which has been extended until May 12, 2020, the local State Salary Unpaid Laid
hotel sector is expected to lose RM3.3 billion in income by Reduced Leave Off
June 2020 [2]. With no further government help (e.g., a Kuala Lumpur 2880 3641 542
financial loan), over half (47%) of respondents said they Sabah 893 1075 177
would be forced to close hotels [11]. Penang 240 430 84
Selangor 134 1812 238
Table 1 Severity of hotel room cancellations Negeri Sembilan 0 179 130
Ranking State Room Loss due to Johor 108 202 72
Cancellation cancellation Kedah 0 80 0
(RM) Perak 91 595 245
1 Kuala 55,050 23, 021,301 Melaka 65 191 85
Lumpur Pahang 0 150 231
2 Sabah 32,392 11, 550,605 Sarawak 175 258 92
3 Pulau 17,753 8,908,000 Source: Lee-Peng Foo, Mui-Yin Chin, Kim-Leng Tan
Pinang & Kit-Teng Phuah (2020)
4 Selangor 22,929 7,212,048
5 Negeri 13,534 6,690,500 3) Important Features of the Technology to Tourism and
Sembilan Hospitality Industry
6 Johor 18,455 5, 636,470
7 Kedah 3239 3,291,500 Due to the outbreak of the Covid-19 pandemic, the tourism
8 Perak 2403 1,022,289 and hospitality industry has been affected heavily. Thus, this
9 Melaka 4074 690,499 results from the industry to accelerate adapt to new
10 Pahang 180 144,628 technological innovations and applications in other to
11 Sarawak 76 22,535 maintain and improvise in one of the most crucial areas in the
Total 170,085 66,190,364 hospitality industry which is to provide a better guest
Source: Lee-Peng Foo, Mui-Yin Chin, Kim-Leng Tan experience.
& Kit-Teng Phuah (2020)
The best approach that has been introduced is blockchain
iii. Loss Employee in Hospitality and Tourism technology. Blockchain technology can provide stability and
Industry security as it is decentralized which information that has been
recorded is secured and resistant to modification which
The World Travel & Tourism Council warned that the prevents data manipulation. This feature is important when
COVID-19 pandemic might result in the loss of 50 million dealing with financial transactions such as providing a more
jobs in the tourism industry throughout the world. Many secure payment in the hotel industry. One of the largest
workers are unable to go to their places for work because of tourism companies, TUI employed blockchain technology
travel restrictions, border closures, and quarantine through the BedSwap project. The implemented technology
procedures. As a result, it also give an impact on wages, enables the company’s system to maintain records of the
particularly for informal and casually employed workers. The hotel bed inventories in real-time which the available bed
tourism industry is facing bankruptcies, business closures, inventory can be offered across markets without an
and massive unemployment as a result of this pandemic. The intermediary such as Expedia to manage the information.
COVID-19 pandemic is expected to impact all jobs in the This helps to save costs and increase the efficiencies of the
company finances. Blockchain technology also enables an
easy-to-implement loyalty rewards program. One of the
blockchain technology that has been implemented in
Malaysia is the MySejahtera system. Sejahtera was designed
to track and trace the infection for the Ministry of Health to
contain and isolate the infected persons [13]. Users are
required to scan a barcode for data collection every time
before entering public places such as public transportation,
malls, shops, and hotel. It was more convenient for customers
to enter the hotel by showing the digital vaccination
certificate through the MySejahtera application on their
mobile phones.
Besides that, the implementation of Artificial
Intelligence (AI) technologies in the hotel industry have been
significantly increased. To reduce person-to-person contact,
the tourism and hospitality industry are encouraged to use
robots to increase social distancing and adapt to contactless
options. KT Corporation which is one of the South Korea-
based telecom company has launched its second-gen GiGA
Genie hotel robot which is designed to improve service
delivery [7]. “N Bot” robot has been used by the Novotel
Ambassador Dongdaemun Hotels & Residences in Seoul to
deliver bottled water and amenities such as towels, slippers,
toothbrushes, shampoo, and body cleansers before midnight
to avoid the in-person room service late at night. N Bot is very
user-friendly as it can make in-room deliveries via touch
screen order and voice command and the user interface is
available in many languages such as Korean, English, and
Chinese. In Guangzhou hotels robots are used on the frontline
delivering housekeeping, doubling as a waiter in hotel
restaurants, preparing food and beverages in-room dining
services in other to protect and prevent the further spread of
the Covid 19 disease. Moreover, using robots as robotic
maids not only can save costs and reduce the number of staff
that must come to work physically, but it also can enhance
service quality and customer satisfaction. Implementing the
robots technology hoteliers might save a lot of money,
minimize human mistakes and provide better services [6].
D. CONCLUSION
It can be concluded that the outbreaks of the Covid-19
pandemic impact the global economic, political, and socio-
cultural systems. Covid-19 has given positive and negative
impacts on the tourism and hospitality industry. It also gives
an impact on technology. So that the industry uses this chance
to improve their performance in their industry. Due to the
current pandemic situation, the tourism and hospitality
industry has become more resilient and adapted faster to
recover. Hence a few alternatives have been implemented to
recover and sustain throughout this challenging period such
as by using blockchain technology which can provide a more
stable and secure service to protect the information and data
that has been recorded from an irresponsible person. The
other alternative that has been used is by using robotics
technology to provide a better service and reduce person-to-
person contact during the pandemic.
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