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The Impact of Pandemic on UK Restaurants

The Covid-19 Pandemic presented unexplored challenges to the hospitality industry and

academia and created new opportunities for hospitality research scholars. The magnitude and the

devastating effects of the crisis on hospitality operations, employees, and customers surpass

those of previous crises. The Safety and security measures given by authorities to prevent new

infections, the spread of the virus, and to counter the pandemic fear, including stay-at-home

orders, community lockdowns, mobility and travel restrictions, and social distancing, led to the

temporary closure of many hospitality, and significantly reduced the demand for operating

businesses. Consequently, travel restrictions, stay-at-home orders, and limiting restaurant

operations to take-outs only resulted in a drastic decline in hotel occupancies and revenue.

Besides, job insecurity uncertainty mediates the association between the fear of economic crisis,

the threat of unemployment, and mental health. The wave of job insecurity created by the

pandemic led to mental health issues, including increased fear, anxiety, and depression which

negatively affect the proper functioning of employees at the workplace. This review affirms that

the pandemic presented the worst economic crisis that adversely affected the hospitality industry.

Theoretical Framework

Social System Theory (SST)

The literature will utilize the SST as a foundational framework to explain the effect of the

pandemic on the individual, organization, community, industry, country, and the world as a

whole. SST presents society as a complex system of elements, including individuals,

organizations, communities, and human groups, as they interact and relate to the country and the

world (Shapoval et al., 2021). SST demonstrates the interactions and relationships among these

groups and has its foundation in communities. According to the SST, the elements of the system
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are interconnected and related such that an effect on one of the components affects the other

parts and the system as a whole (Shapoval et al., 2021). According to Shapoval et al. (2021),

Reicherter and Billek-Sawhney employed SST to study social systems and emphasize the adult

communities to promote social welfare among residents and communities. SST helps examine

the effect of Cvid-19 on the interrelationships between individuals and social communities such

as human groups, hospitality organizations, the hospitality sector, the nation, and the world

(Shapoval et al., 2021). Specifically, the infection of an individual as a component of the social

system will affect the hospitality businesses, industry, country, and the world.

The Status of the hospitality Industry before the pandemic

The House of Commons Library defines the Hospitality industry as the service industry

providing food and accommodation. The industry consists of restaurants, hotels, cafes, bars,

pubs, catering, campsites, and accommodations. Before the pandemic, the hospitality sector

contributed £59.3 billion as gross value added to the UK economy accounting for 3.0% of the

country's total economic output in 20219 (Hutton & Foley, 2021). As of January 2020, the sector

had 223,045 businesses representing 3.7% of all UK businesses (Hutton & Foley, 2021).

Similarly, 137,225 hospitality businesses were employers making up 10% of the UK total of

employers. According to the World Travel and Tourism Council (WTTC), the industry

contributed directly or indirectly to 1 out of 4 new jobs created in the global labor market before

the Pandemic (Aharon et al., 2021). Accordingly, the travel and tourism sectors accounted for

10.6% of all jobs, amounting to 134 million and 10.4%, which is US$9.2 trillion of global GDP

(Aharon et al., 2021).

The Pandemic Impact Analysis on the Hospitality Sector

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The coronaviruses pandemic had profound adverse social, economic, and psychological

effects. According to Gursoy and Chi (2020), the Covid-19 Pandemic almost shut down the

world economy overnight. While the pandemic affected all industry sectors, the hospitality sector

was the hardest hit. Social interaction and the high mobility of people are fundamental features

of the hospitality industry, making it the most vulnerable to new infections and the spread of the

virus. As a result, the World Health Organization (WHO) and governments introduced safety

measures to combat the spread of the virus, which presented unprecedented challenges to the

industry (Gursoy and Chi, 2020). Specifically, the hospitality industry adversely affected trading

restrictions ranging from mandatory closures, opening hours limits, lockdowns, and stay-at-home

orders to travel. Additionally, rules limiting the number of people meeting indoors, interactions

between households, table service requirements, and alcohol sales affected customer demand and

capacity (Hutton & Foley, 2021). Notably, restrictions imposed on hospitality avenues decreased

customer demand for eating out at restaurants resulting in a decline in sales for the industry in

2019.

However, the Eat Out to Help Scheme helped increase the number of people eating out in

restaurants in August 2020. Surprisingly, Hutton & Foley (2021) point out that dining out rates

declined significantly below the 2019 levels due to new customer restrictions imposed by

authorities in September 2020. Besides, Gursoy and Chi (2020) noted that such restrictions

resulted in challenges of constant fixed costs, accumulated debts, persistent low revenues, and

cash reverses. According to the Commons Library Briefing, the hospitality sector saw the biggest

economic output decline of all economic sectors since the pandemic. The sector's economic

output declined by 90% as of April 2020 (Hutton & Foley, 2021). While easing Coronavirus

restrictions and the Eat Out to Help Out Scheme helped boost and recover the output, Hutton &
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Foley (2021) argue that it is still below the pre-pandemic level. Increased output in the food and

beverage service sector helped the industry record a 71% growth in August 2020 due to easing

lockdown restrictions and the summer holiday period.

Further, the status and proportion of hospitality businesses decreased with the

heightening of pandemic restrictions. The industry recovered slowly and trailed behind the other

sectors as only 43% of hospitality businesses were operating compared to 74% of the other

industries by early March 2021(Hutton & Foley, 2021). Moreover, the proportion of trading

businesses increased when businesses reopened. In contrast, the proportion of hospitality

businesses that paused operations was larger than that of other sectors. Hutton & Foley (2021)

report that 55% of hospitality businesses temporarily paused operations compared to 24% across

the other industries, while 2% ceased trading permanently. According to Hutton & Foley (2021),

the hospitality sectors had higher business proportions with low cash reserves, profits, and

business confidence. Correspondingly, business turnover in hospitality declined to its peak in

April 2020 than the start of the Pandemic in March (Hutton & Foley, 2021). The food and

accommodation sectors saw a turnover increase in summer and December 2020 due to a trading

boost over Christmas.

The pandemic affected the labor market, leading to a fall in the number of food and

accommodation service sector workers. The lack of visitors and low hotel occupancy rates forced

the management to impose temporary layoffs for employees to reduce labor costs. Hutton &

Foley (2021) mentioned that the industry recorded a drop of 6% in employees between March

and September 2020. However, the Coronavirus Job Retention Scheme (CJRS) helped reduce the

drop in the number of workers, not increase unemployment as furloughed workers are still in

employment. The government furloughed jobs under CJRS in the food and accommodation
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industry, of which the number of furloughed peaked at 1.6 million jobs in April 2020 and began

to drop by October (Hutton & Foley, 2021). Notably, the furlough scheme provided grants to

employers to retain and pay employees despite the pandemic effects. The pandemic led to a

decrease in the number of weekly hours worked in the hospitality sector. According to Hutton

and Foley (2021), the average weekly hours worked in the sector dropped to 13.00 hours from

27.9 hours for the same period in 2019. The significant fall in working hours results from the full

shutdown of the sector in the lockdown measures by the government.

The Role of Job Insecurity and Non-employability on mental health

The pandemic impacts psychological distress for workers in the hospitality industry. The

pandemic increased the insecurity of being unemployed among employees, which negatively

affected their mental health. An investigation of the effects of economic crisis and non-

employability of employees during the pandemic shows that it influences the perception of job

insecurity, which results in mental health problems. According to Khan et al. (2021), job

insecurity mediates the association between the fear of economic crisis, non-employability, and

employees' mental health. Unexpected changes in social-structural conditions influence fear and

anxiety, which compel people to cause self-harm or suicide.

Research reports that an economic crisis comprising unemployment, job insecurity,

financial suffering, and fear of job loss is a macro stressor to employees (Jones & Comfort,

2020). Fear of economic crisis is the employee's perception that loss of jobs will happen in the

organization. The economic crisis of unemployment pressure leads to financial hardships and

suffering, which cause fear of job loss and psychological distress. According to Khan et al.

(2021), economic crisis shapes anxiety, stress, absenteeism, and turnover, affecting employees'
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health. Research has demonstrated the economic crisis directly affects the mental health of

employees.

On the other hand, non-employability is employees' susceptibility to prevailing

uncertainties in the labor market. According to uncertainty management theory, employees

become sensitive and vulnerable when organizations lay off workers due to uncertain times

(Khan et al., 2021). Workers fearing unemployability view their organizations as incorporative;

thus, they fear the economic crisis. Employability refers to a set of working skills that would help

employees to get another job. Employees with a non-employability perception believe it is

challenging and impossible to secure another job with their current working skills (Khan et al.,

2021). This thought and perception negatively affect the individual's mental health during austere

times. Accordingly, the fear of non-employability negatively affects the employees and tier

families.

Further, job insecurity is the fear that an individual will lose a job without the possibility

of retaining it. Similarly, Greenhalgh and Rosenblatt defined job insecurity as the vulnerability

of an unemployment threat that a person faces when working in an organization (Davahli et al.,

2020). Research has demonstrated that job insecurity has many repercussions, including mental

health complaints, low commitment, and lack of job satisfaction (Jones & Comfort, 2020).

Correspondingly, the economic crisis is a major factor that triggers fear of job insecurity.

Economic instability and fear of job loss make employees believe that they no longer have long-

term relationships with the organization. As a result, employees will perceive that no one is safe

from job insecurity. This sense of vulnerability increases the fear of job insecurity, which

adversely impacts employees' mental health (Khan et al., 2021). Therefore, this review links job
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insecurity as a mediator between non-employability and mental health. Accordingly, job

insecurity causes restlessness among employees, affecting their mental health.

The global emergency sparked worldwide economic downturns and decreased returns

across industries. Besides, the increased number of infection cases created stress, panic, and

nervousness among people worldwide. Khan et al. (2021) mentioned that people experience

psychological issues, panic attacks, and anxiety after realizing the disease has no cure. Critically,

while the government and the media countered the Pandemic fear by creating awareness,

lockdowns, and preventive measures, the psychological effect aspect that affected the people's

mental health was ignored by authorities.

Researchers have reported that the disease negatively affects people's health, leading to

depression and anxiety. Studies indicate that government policies such as lockdowns result in

substantial consequences of fear of job loss and financial security (Khan et al., 2021). The fear of

job insecurity in the private sector has been an ongoing threat that increased during the

pandemic. Khan et al. (2021) argue that employees have more fear of being laid off from their

current jobs than fearing being infected. Studies demonstrate that the threat of losing

employment and income cause individuals to panic and take years to recover from the fear of

non-employability. Prior research shows that pandemics significantly impact employee mental

health and performance. According to Khan et al. (2021), the workplace's unemployment threat

and occupation uncertainty are directly linked to unexpected low performance. Correspondingly,

the job insecurity threat increases employees' fear, anxiety, job burnout, and depression. More

importantly, the impaired mental health of employees influences their attitude, which affects the

quality of their service.

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The pandemic created an economic crisis in the hospitality sector. It is because hotels

were restricted to entertaining guests, entrepreneurs closed restaurants for dine-in, laid-off

employees, remaining workers became under non-employability threat, and tourism was on halt.

Besides the economic crisis, the pandemic initiated a wave of unemployment threat and

uncertainty, leading to mental problems among employees. Khan et al. (2021) found that mental

health is vital for the proper functioning of employees in the workplace. Further, they added that

mental health affects employees experiencing job insecurity and the families and friends of the

workers. This literature reviews the effect of economic crisis fear and the threat of

unemployment on employees' mental health in the hospitality sector. The impact of pandemics

on employees' psychological distress and mental health is under-researched, leaving a dearth of

literature in this area (Khan et al., 2021). As a result, the review seeks to cover the gap in the

literature and add a new perspective for managers to consider pandemics' effect on workers'

mental health as a critical issue.

The Pandemic Impact on Global Hospitality

The pandemic had an impact on various aspects of the global hospitality industry. Most

studies have reported the effects of the Covid-19 Pandemic on the hospitality sector, including

loss of jobs, revenue losses, challenges in accessing loans, decrease in market demand, the

emergence of new markets, hostility towards foreigners, and problems of hotel workers (Davahli

et al., 2020). Nicola et al.'s summary of the effect of the Covid-19 Pandemic on the world

economy divides it into primary sectors comprising agriculture, oil, and petroleum, the

secondary sector made of the manufacturing industry, and the tertiary, which includes hospitality

and tourism, aviation, and food sector (Davahli et al., 2020). The summary concluded that the

hospitality, tourism, and aviation sectors reported decreased market demand, job loses, and
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revenue losses. Ozili and Arun analyzed the global impact of the pandemic on the travel and

restaurants industries. They categorized various policies implemented by different nations into

human control policies, public health measures, monetary measures, and fiscal policies (Davahli

et al., 2020). The study observed that human control measures, including foreign travel

restrictions, domestic travel restrictions, mass gathering limitations, state of emergency

declarations, and limiting access to shops and restaurants, adversely affected the hospitality and

food sector.

Other studies focused on the impact of the pandemic on undocumented workers and hotel

cleaners in the hospitality industry. The research established that undocumented migrants are the

most vulnerable workers in the hospitality industry, but they cannot receive government financial

support since they don't have proper documentation (Davahli et al., 2020). Similarly, the workers

faced challenges of job insecurity, lack of health insurance, increased workload pressure, risk of

Covid-19 exposure, and working extra time to ensure full disinfection during the Pandemic

(Davahli et al., 2020). The commons library briefing reports that the most affected food and

accommodation sectors had the highest proportion of minority ethnic group employees. For

instance, the sectors employed 17% of workers from Black, Asian, and Minority Ethnic (BAME)

backgrounds compared to 13% from the whole UK economy (Hutton & Foley, 2021).

The general state of the tourism and travel industry became under threat during the

pandemic period. Substantive literature shows supporting evidence of the adverse effects of the

pandemic on the performance of the hospitality industry. The American Hotel and Lodging

Association report shows that losses in the US hotels were estimated to be $51.2 in room

revenue, and job losses were expected to reach 546,000 by early 2021 compared to the same

period in 2019 (Aharon et al., 2021). Correspondingly, approximately 72% of hotel rooms
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representing half of the US hotel markets, went through a recession (Aharon et al., 2021). These

figures indicate that most of the hospitality industry has a long way to recover, given a 35%

occupancy rate makes it challenging for hotels to operate. Moreover, major operators and hotels

in the industry projected occupancy rates below 20%.

A review of the impact of the pandemic on the hospitality industry in China shows

that the sector experienced a severe decline in occupancy rates and lost US$59 billion in revenue

(Aharon et al., 2021). Notably, the industry closed nearly 74% of China hotels for 27 days from

January to February 2020. In addition, hotel occupancy dropped from 70% to 8% and remained

at this level for more than 28 days (Gursoy & Chi, 2020). Consequently, the industry reduced the

number of employees resulting in a substantial decrease in cash flow and revenue. In China, a

study on the phenomenon of "travel fear" by Zheng et al. reported that the perceptions of threat

severity and susceptibility create travel fear, leading to protective behaviors on travel decisions

(Aharon et al., 2021). "Travel fear" evokes psychological resilience strategies in people and the

adoption of cautious travel behaviors. In another study, Villace-Molinero et al. explored the

perceptions of travel risks during the pandemic and suggested measures to boost travel

confidence (Jones & Comfort, 2020). A qualitative study surveyed 46 countries and interviewed

28 international hospitality experts. The writers concluded that people have confidence in local

government communications on personal safety and security during pandemics and consider

them seriously before making travel decisions.

Gaps in Literature

Governments and scholars have mostly focused on implementing measures such as

lockdowns, preventive measures, and creating awareness to counter the fear of the pandemic.

Nevertheless, the authorities ignore the psychological aspect of the pandemic that directly affects
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mental health (Khan et al., 2021). The impact of the pandemic on mental health in the hospitality

sector is under-researched, leaving a gap in the literature. Therefore, this review will cover the

gap and open new dimensions for managers to consider workers' mental health as a critical issue

during pandemics (Khan et al., 2021). Specifically, the review on how job insecurity perception

mediates the association between the fear of non-employability, economic crisis, and mental

health will help better understand the factors that influence mental health issues among

employees during pandemics (Gursoy & Chi, 2020). Besides, the study explores the

psychological factors that affect employees during pandemics. Therefore, despite substantial

literature reports on the amount of research conducted to discover the Covid -19 vaccine, there is

hardly any research on the mental suffering of employees during the pandemic.

Limitations of the Study

The literature review is not without limitations. Firstly, the study draws its main findings

from secondary data analysis rather than primary research study participants. Literature on the

impact of the pandemic on the UK hospitality industry was scarce, and this study obtained data

from government publications and reports (Hutton & Foley, 2021). Moreover, most of the

reviewers collected data from hospitality industry employees, making the findings not

generalizable to other industries and sectors of the economy. Most of the review articles were

written when scholars discussed the direction of their findings. For instance, some studies have

reported job insecurity predicts employability, while others established that employability

predicts job security (Khan et al., 2021).

Directions of Future Study

Future studies should explore other factors that influence employees' mental health

during pandemics rather than the fear of job insecurity and the threat of economic crisis.
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Secondly, future studies should focus on the impact of the Covid Pandemic on the other sectors

of the economy for comparisons and the generalizability of findings in the other industries (Khan

et al., 2021). Future researchers need to investigate the role of the initial level of mental health in

influencing fear of economic crisis before the effects of pandemics (Khan et al., 2021). Lastly,

rather than using job insecurity as a mediator, future studies should focus on job stress, lack of

social support, and future career anxiety to understand the association between the fear of

economic crisis, non-employability, and mental health.

Conclusion

The Covid-19 Pandemic created unexplored challenges for the hospitality industry.

Covid-19 was the biggest decade challenge with devastating effects on the hospitality sector

operations, employees, and customers that nearly shut down the world economy overnight.

Government authorities implemented safety and security policies and measures to combat the

spread of the disease. Strategies and measures including community lockdowns, stay-at-home

orders, travel and mobility restrictions, and social distancing led to a decline in demand for

hospitality services, occupancy rates, revenues, and job furloughing schemes. Besides, the

pandemic created a wave of job insecurity and unemployment threat, contributing to mental

health problems such as panic, fear, anxiety, and depression. The fear of losing an ongoing job is

greater than the fear of being infected, and it takes years for individuals to recover from the fear

of non-employability. While the hospitality sector is recovering slowly due to the lifting up of

coronavirus restrictions, the hospitality sector's economic output is still below the pre-pandemic

levels. Therefore, the pandemic affected the hospitality industry more than all corporate sectors.
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