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IMPACTS OF COVID-19 PANDEMIC ON TOURISM & HOSPITALITY

INDUSTRY IN BANGLADESH.

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Shelamony Hafsa
Lecturer, International Tourism and Hospitality Management
School of Business, Primeasia University, Bangladesh

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E-mail: [email protected]

Abstract:

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This article tries to find out the impacts of COVID-19 on Tourism and Hospitality Industry in
Bangladesh and presented some recovery plans for minimizing those negative impacts. This

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study is carried out based on the secondary data sources, various literature, newspapers,
organizational and government publications, website materials and other sources are used to find
out and complete the analysis. COVID-19 has created an anxiety around the globe. Bangladesh
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has already started to face its horrible look. The economy of Bangladesh is just sunk and like
other industries tourism industry is facing most awful situation ever before. Due to lockdown
people cannot move from one place to another. As the number of COVID-19 positive cases
increasing day by day, government bound to take this hard decision (lockdown). All international
flights have been cancelled and stopped for long days; accommodation business
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(hotels/motels/resort owners) already started to face a countless loss. Small

hotels/motels/restaurants/travel agencies already closed their businesses; thousands of people
working in tourism industry have started to become jobless. Already government of Bangladesh
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offered different special packages for recovery and ensuring sustainability of different sector.
Tourism industry also needs to offer different stimulus and discount packages for attracting
domestic tourist which will help to recover the losses. This study also presents the real scenario
of tourism industry during COVID-19 pandemic which will help to know the update knowledge
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regarding the impacts of COVID-19 on tourism and hospitality industry and to take proper
recovery steps.

Introduction:
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COVID-19, an infectious disease caused by SARS-CoV-2, was first identified in December 2019
in Wuhan, Hubei, China (Mayo clinic, 2020) but now the whole world is suffering from COVID-
19 outbreak. It creates an unstable and emerging situation around the world. Around two-million
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people in 185 countries around the globe have been identified as confirmed cases of COVID-19
(Corona virus) (Dong E, Du H, Gardner L, 2020). Like others, Bangladesh is also suffering from

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
 Corona virus pandemic. The country confirmed the first COVID-19 case in its territory on March

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2010 but now identified cases number crossed 145,483 in 30th June 2020 (Report of IEDCR,
30th June, 2020). The number of infected cases as well as death cases is increasing day by day
here and entire economy is facing a devastating situation. To reduce the spread of Corona virus,
Government took a lot of initiative like lockdown, general holiday, selection of restricted area,

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zone-wise lock down etc. Due to lockdown, people cannot travel even in domestic area for long
time. Travel activities were remained closed till second week of March 2020. Still now tourism
spots are remained closed. Now, hotel, motel, restaurant, transportation facilities are opened in a
limited away. But people afraid to move and travel due to the increase number of COVID-19
patients. Tourism and Hospitality industry stays at one of the major sector which is going to look

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more shocking situation due to COVID-19 outbreak. This study will discuss about the impacts of
COVID-19 on tourism and hospitality industry in Bangladesh and present some recovery plans
for re-shaping tourism industry to minimize present losses.

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Key words: COVID-19, Tourism, Tourism and Hospitality industry, economic and other effects,
recovering methods, Bangladesh.

Methodology: er
This study is basically qualitative in nature and necessary data are collected from different
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secondary sources. Data are collected from different newspapers, articles, journals, UNWTO’s
(United Nations World Tourism Organizations) reports , World Health Organization’s reports,
tourism related various organizations’ (PATA, TEAB, TOAB etc.) reports and other relevant
secondary data sources.
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Analysis and findings:

Tourism industry doesn’t deal with only one industry or sector it also connected directly or
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indirectly with other industries- attraction (natural &man-made attractions), transportation

(surface, air and water transport system & providers), accommodation (hotel, motel, resort, home
stay and others), intermediaries (travel agencies and tour operators), amenities providers
(Telecommunication, restaurants, food & beverage providers, entertainment facility providers
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etc.) and others.

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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
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Figure-1: Components of Tourism Industry

Accommodations

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Intermediaries

Transportations
Amenities

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Tourism
Attractions Others
Industry

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Source: Developed by Author (2019)

So, COVID-19 situation has more or less halted all of these mentioned sectors and directly or
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indirectly affect tourism industry. Tourism industry is one of the growing and potential drivers
industries in the economy of Bangladesh. In 2018, its contribution in total GDP was 4.4% which
is gradually increasing each year. The international tourism expenditure was worth USD 1208
million which belongs to comparatively moderate among the South Asian countries. But now
this country has to face a different scenario due to COVID-19.
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In Bangladesh, November to June is the ideal time or peak season for tourism business.
According to tourist experts, the months of February –March have long been the season most
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ideal for visiting the country’s major beaches. This post winter time is best period for travelling
country’s one and only coral island-Saint Martin. Bangladesh tourism and hotel sector has fallen
on real bad times. The impact of COVID-19 has proved so massive that it might take years for
the sector to return to its normal shape. It fell on the nation like bolt from the blue. Like all other
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sectors, people involved in the tourism business have started drawing a picture on estimated
losses. With the popular spots lying deserted, hotels closed and the tour operator and other
stakeholders have to stop their work. So, they could find themselves one of the worst victims of
coronavirus outbreak.
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The World Tourism Organization’s (UNWTO) mentioned in their site “Tourism Support
Measures” that Bangladesh tourism industry will face a loss of about TK 40 billion (USD 470
million) this year. As all internationals fights postponed their operations and domestic travellers
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can’t move due to lockdown and facing current panic situation, tourism industry is facing more
vulnerable situation right now.

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
 Alongside, Tour Operator Association of Bangladesh (TOAB) forecasts that tourism sector of

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Bangladesh will suffer a loss of around TK5,700 crore due to the outbreak of COVID-19. They
forecast around 40 lakh people are employed in this sector (including tour operators, travel
agents, hotels, motels, resorts, airlines, transportation, cruising etc.) ( The Business Standard ,4th
June,2020). So directly or indirectly they are in great risk. TOAB president presented a proposal

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to get bank loan with a minimum interest rate and other government’s support for survival of
tourism industry (Travel Bangladesh, 30th June, 2020).

Cox-bazar is known as the tourist capital of Bangladesh. The economy of cox bazar, Saint
Martin Island is largely dependent on tourism. According to TOAB, only cox-bazar district is

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going to face a loss of BDT 20 billion revenue till Eid-Ul-Fitr. As aviation, tourism, hospitality,
transportation and accommodation industries are interlinked to each other. All have to face
trouble at their business. Aviation have to cancel their fight, hotel, transportation are stopped due
to lockdown. The shattering situation creates in hotel/motel/resorts and other accommodation

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businesses. The occupancy situation of different 2* to 5* hotels around Bangladesh are shown in
following figure:

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Figure-2: Impact of COVID-19 on the occupancy rate of luxury hotels
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100%
90%
80%
70%
Usual rate
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60%
50%
Current rate
40%
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30%
20%
10%
0%
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Pan Pacific Inter Amari Le Meridien Radisson

Sonargaon Continental Dhaka Dhaka Blu
Dhaka Chattogram
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Source: The daily star (15th March 2020)

Occupancy rate of all hotels are decreasing as well as wearing a deserted look due to Corona
virus outbreak. According to the secretary of Bangladesh International Hotel Association, this
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time was the peak season and but due to Coronavirus now occupancy rate reduced by 30%.
Abu Hanif Bari, Company secretary and head of admin at Sena Hotel Development said “The

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
 crushing impact of Coronavirus on the travel industry has had a devastating effect on hotels in

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Bangladesh”. According to above figure-2, The occupancy rate of hotel Amari Dhaka sank to
just 10 percent, The Six Season Hotel already lost TK 1.5 crore since the outbreak began.
Occupancy rate of La Meridian Dhaka dropped from 90-95% to about 60%. Hotel industry have
started to close their some unique services as well as reducing the number of employees because

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this not possible to settle the payment of employee during this situation.

Not only hotel, aviation industries situation also catastrophic. The IATA forecasted that global
air transportation revenue will be dropped by 11% in 2020 which means a loss of $163 billion
dollars (IATA, 2020). They also forecast that around 25 million aviation-related jobs are at risk

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globally now. Due to this outbreak situation, flights have to cancel and stopped for long time
which causes losses for airlines. The impacts of COVID-19 on weekly flights number during the
initial time of lockdown are shown below.

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Figure-3: Impact of COVID-19 on weekly flight numbers

400
350
300
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250
200
150
100
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50
0
Biman Us-Bangla NovoAir
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Bangladesh Airlines
Airlines

Before lockdown After lockdown

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Source: The daily star (23rd March 2020)

Airlines are obliged to suspend their International flights as per Government direction.
Government has cut air connectivity with other countries to curb the spread of Coronavirus in the
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country which also creates losses for airlines. According to the report of The Daily star, local
airlines were on course to losing TK 350 crore in revenue just in March month due to COVID-19
pandemic situations around the globe. Here, figure-3 shows the flights number before and after
lockdown which clearly shows the horrible situations of different airlines.
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Moreover, Different supportive organizations are trying to estimate and forecast the losses of
travel and tourism sector and finding out probable recovery plan for reshaping country’s tourism

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
 industry. Pacific Travel Association (PATA) Bangladesh Chapter prepared a statistics presenting

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COVID-19’s impact on tourism and present tourism industry’s situation in Bangladesh. Tourism
industry of Bangladesh largely depends on domestic tourism. About 10 million domestic tourists
travel each year and the turnover is around 35 billion in a year. International travelers also
cancelled their travel schedule due to COVID-19. Thousands of small hotel, resorts, motel, travel

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agencies and other travel related organization have to close their service due to this pandemic.
Aviation industry is also going to face a great loss which estimated as loss of 6 billion taka and
around 2000 people involved with aviation industry will become jobless. The estimated losses of
tourism and hospitality industry are presented in following graphs.

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Figure-4: Forecasted Number of jobless people in Tourism and Hospitality Industry due to
COVID-19 pandemic

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Forecasted number of
150000
jobs at risk in…

100000

50000
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Source: PATA Bangladesh Chapter (2020)

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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
 Figure-5: Forecasted losses in Tourism and Hospitality Industry in Bangladesh due to COVID-19

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Forecasted losses in taka (crorers) in Tourism and
Hospitality industry in Bngaldesh

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Transportation directly &indirectly involved in tourism
Restaurants, coffee shop and others
Tour Operator (Umra,land package)
Tour Operator (Domestic)

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Tour operator( Outbound)
Tour Operator (Inbound)
Travel agent
Hotel/Resort (2*-5*)

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Aviation:Private airlines

0 500 1000 1500 2000 2500 3000 3500

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Forecasted losses in taka (crorers) in Tourism and Hospitality industry in Bngaldesh
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Source: PATA Bangladesh Chapter (2020)

According to the above mentioned figure-4 and figure-5, hotel/resorts/INN (2*-5*) are going to
face a loss of 15 billion (1500 corer) taka as a result of which 100000 people will become
jobless, travel agents going to face loss of 30 billion taka and to create 1500 jobless people, Tour
Operator (inbound) is going to face loss of 1 billion (100 crore) taka and create 1000 jobless,
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Tour Operator (Outbound) is going to face loss of 25 billion (3000 crore) taka and create 15000
jobless, Tour Operator (Domestic) is going to face loss of 1000 crore taka and create 15000
jobless, 4.5 billion taka loss will be faced only at UMRA (land package). Restaurants, coffee
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shop, bar and others will have to face a loss of 4.5 billion (500 crore) taka and to create height
unemployed people (around 150000 jobless). Transpiration directly or indirectly involved with
tourism has to face a loss of 55 crore taka and to create 16500 jobless people. So, the forecasted
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total loss till June 2020 is around 97.5 billion taka and more than 3 lac people will become
jobless which will create a devastating socio-economic situation in Bangladesh.

So, it can be said that the entire tourism and hospitality industry around the globe is going to face
a bog disaster and this will continue till the COVID-19 situation become normal. Necessary steps
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and plans need to develop for recovering this estimated loss.

Recommendations and Conclusions:

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As tourism industry works with the amalgamation of too many other industries, it’s not possible
to any single industry to recover the entire loss of tourism and hospitality industry. Both public

This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
 and private relevant organizations need to come forward to take proper recovery plans. The

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Government of Bangladesh already announce its annual budget for aviation & tourism industry,
now proper utilization of this budget is essential for recovery tasks. The Government of
Bangladesh also announced a stimulus package to support the tourism sector where banks will
provide loans at 9% interest and government will bear 4.5% interest and other 4.5% need to be

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bearded by the business (UNWTO, 9th April, 2020). Now Bangladesh should focus on domestic
tourism, special discount packages need to be developed to attract tourists. The promotion of
village tourism, agro-tourism, community-based tourism needs to be practiced which will help to
enhance visitor’s interest of travel as well as improving the economic conditions of country.
Moreover, policymakers must have to ensure and monitor the proper utilization of resources as

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well as proper execution of their recovery plans which will bear more fruitful result for tourism
industry in Bangladesh.

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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196
 Reference:

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Dong E, Du H, Gardner L. “An interactive web-based dashboard to track COVID-19 in real
time”. Lancet Infect Dis. (2020). 10.1016/S1473-3099(20)30120-1

PATA Bangladesh Chapter (2020): “COVID-19: Impact on the Tourism and Hospitality industry

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in Bangladesh”. Available at https://www.pata.org/pata-bangladesh-chapter-covid-19-impact-on-
the-tourism-industry-in-bangladesh/

The finance today published a report on “COVID-19 to cost BD’s Tourism sector TK 40Bn:
UNWTO”. Available at https://www.thefinancetoday.net/article/tourism/10890/Covid-19-to-

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cost-BDs-tourism-sector-Tk40bn-UNWTO.

“IATA updates COVID-19 Financial impacts-relief measures needed”. Available at

https://www.iata.org/en/pressroom/pr/2020-03-05-01/

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Reported by Mahmudul Hasan, “Local Airlines battling an existential crisis”-The Daily Star
(23rd March 2020)

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Reported by Mahmudul Hasan, “Coronavirous fears: hotels become ghost downs”-The daily Star (15th
March 2020)
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“Tourism sector to lose TK 5700cr because of covid-19: TOAB”-The Business Standard (4th June, 2020)

“Bangladesh rural economy reels from shutdown”-The Business Standard (13th June, 2020)

Written by Md. Ziaul Haque Howlader “Drawing up tourism recovery plan”-Financial Express (13th June,
2020)
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Coronavirus disease 2019(COVID-19) - symptoms and causes”-Mayo Clinic. Retrieved 14th April, 2020
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Report of IEDCR, 30th June, 2020. Available at https://en.wikipedia.org/wiki/COVID-

19_pandemic_in_Bangladesh#30_June
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This preprint research paper has not been peer reviewed. Electronic copy available at: https://ssrn.com/abstract=3659196