Foundation Year Research Project Case Study

How COVID-19 Impacts the Business Prospects of Tourism Industry: A Case Study of JW Marriott

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Introduction - Effective Research Planning for Meaningful Studies

Research Planning

Research planning involves meticulous organization and strategizing before diving into a study. It encompasses outlining objectives, determining methodologies, setting timelines, and allocating resources. Effective planning ensures a clear direction, minimizes uncertainties, and enhances the chances of successful research outcomes.

Research Title

The following research title is “How covid-19 impacts the business prospects of Tourism Industry: A Case Study of JW Marriot”

Research Background

There is a great deal of discussion surrounding Coronavirus Disease 2019 (Covid-19). The major agent of infection is the SARS coronavirus. The latest coronavirus pandemic has had a devastating effect on the tourist economy (Abbas et al., 2021). Since JW Marriot has been severely affected by the pandemic and is well-known in this region, much attention is paid to this issue in the following investigation, taking into consideration a broad variety of secondary data.

Research Problem

As a consequence of the covid-19 outbreak, retail operations and results have been significantly affected. There were no tangible sales in the sector at all (Bakar and Rosbi, 2020). Covid-19, according to JW Marriott, has a direct impact on the hotel industry's everyday operations and financial performance. This investigation will also include Marriott's behavior. Finally, the suggestions for improvement will be sent to the company's top executives.

Research Aim and Objectives

Through the viewpoint of JW Mariott, the research aims at assessing the influence of COVID 19 on travel and tourism business operations. The key objectives are as follows:

• To find out how Covid-19 is affecting the JW Marriott's activities.
• To learn about Marriot's efforts to mitigate the effects of Covid-19.
• To analyze the effects Marriot has faced under the influence of Covid-19?

Research Questions

• What is the state of the tourist business in the midst of the Covid-19 pandemic?
• In what ways will the effect of Covid-19 affect the operations of the Tourism Industry?
• What are the prospective effects of pandemic on the operations of JW Marriott?

Research Methodology

The strategy that should be used is to do research. The researcher employed the notion of positivism, which maintains that true knowledge may be best obtained by direct observation, in order to analyze the influence of Covid-19 on retail operations: A case study of JW Marriott. We chose deductive research since it is based on assumptions that have previously been demonstrated to be correct regarding the topic that was being researched (Beh and Lin, 2021). Aside from that, the bulk of the investigation is based on secondary sources, which may be books, journals, newspapers, magazines, or websites. In this specific instance, an examination of qualitative and quantitative data was carried out. A number of authors have been given the opportunity to provide their perspectives on the matter as a consequence of the collection of qualitative and quantitative data. The information came from reputable sources, which were collected. The research approach could have certain limitations, but those limitations have been chosen purposefully in an attempt to cut down on errors and biases.

Research Timeline

Research Report

Literature Review

COVID-19 was declared a worldwide pandemic almost a year ago. This year, 145 million people were infected. Over 3 million people have died despite a recovery rate of 85 percent. As a consequence of the outbreak, governments throughout the globe issued the first global travel advisories, cancelled big gatherings, and restricted travel to their own countries. In a monitored setting, it was able to progressively reduce the constraints. As a result of this, governments implemented a minimum policy in terms of social distance and cleanliness, as well as the advice to wear a face mask, which ranged from nation to country (Foo et al., 2021). The epidemic and ensuing lockdowns had a substantial impact on the economies of most nations, with GDPs plummeting significantly. New methods of working need changes in corporate structures and distribution networks in many sectors.

Tourists are a vital source of income, job creation and cultural advancement across the world. The tourism business contributes significantly to the GDP of many cities, regions, and countries. The tourism and leisure industry is critical to both economic activity and customer satisfaction, yet it has become the most vulnerable sector. Pandemics and diseases throughout the globe are the worst for the tourism industry. Travelers' spending may be severely impacted by "black swan" catastrophes like the global economic downturns of 1997 and 2008 and the SARS virus in 2003. Other "black swan" occurrences include social unrest and earthquakes. Shocking virus outbreaks have devastated tourists and consumers alike. Economic and business success relies heavily on conventionally based expert estimates. It may be obsolete and ineffective in the event of a global catastrophe. In light of the COVID-19 ramifications, academic and industry forecasting methods must respond. Global health and societal tragedies have been exacerbated by the current pandemic COVID-19 from late December 2019. (Abbas et al., 2021). Due to the current COVID-19 pandemic, there have been a number of worldwide issues that have had an impact on companies throughout the world, including renewable energy and carbon emissions, as well as economic and health care challenges. in the travel and tourism industry.

The tourism and leisure industry grew at a faster pace in the 2010s because of the increased mobility and involvement of many nations. Travel and tourism have flourished thanks in large part to the dominance of China and the United States (Usher et al., 2020). In response to the increasing number of tourists, a number of localities have sought long-term solutions for coping with the influx of visitors (Thurstan et al., 2021). Regardless of how you slice it, the European economy has benefited greatly from the travel and tourist sector and its contributions. A total of 782 billion euros and 14.4 million jobs were created in the EU in 2018. International arrivals increased globally between 2010 and 2019, according to statistics (Teeroovengadum et al., 2021). International travellers from North America and the Middle East numbered 146.4 million in 2019.

Findings and Analysis

It is already February 2020. After correcting for the Asian financial crisis, worldwide RevPAR growth was down 0.3% in Q1 2018. In January and February, full-service hotels saw a 4% increase in RevPAR. Europe RevPAR climbed 3.2% in the first two months, while the Caribbean and Latin America RevPAR grew 1.2%. This is because of COVID-19 (Papanikos, 2020). Workers returned to work today, a sign of progress in Greater China. A month ago, Greater China had over 90 closed hotels (Simon, 2022). A positive trend in Greater China's occupancy rates is evident.

In other regions of the world, the trend lines are still negative. North America and Europe had about 70% a year ago. That means no gain in performance until the illness spreads slower. Marriott will continue to help customers as the issue evolves. Due to COVID-19, several groups have cancelled 2020 bookings, while many are tentatively rebooking for later in 2020 (Caton et al., 2022).

Nevertheless, Liquidity preservation is a current priority for the company. Marriott has a $4.5 billion revolving credit arrangement that ends June 2024. It has withdrawn $2.5 billion by March 17 to cover commercial paper maturities (Škare, Soriano and Porada-Rocho?, 2021). To save cash, the corporation reduces or eliminates share repurchases, suspends the cash dividend, reduces labor and other expenditures, and reduces investment spending (Cheung et al., 2021). Marriott expects its already announced first quarter 2020 dividend, due on March 31, 2020, to be the final unless circumstances improve. Vendors and other partners are also helping to maintain working cash.

Summarization of Findings

Through analyzing the findings, it can be implied that Liquidity preservation is critical in the present situation for Marriott. A $4.5 billion revolving credit arrangement ends in June 2024. Withdrawals totaled $2.5 billion as of March 17. A reduction in wages and other expenditures, as well as reduced investment spending, are all measures taken by the corporation to save cash. As of March 31, 2020, the business has not repurchased any shares in 2020, save for the $150 million stated in the February 26 news release (Rahman et al., 2021). Suppliers and other partners are also helping to save operating cash. The COVID19 worldwide epidemic and measures to control it harmed Marriott International's first-quarter 2020 performance. The corporation claims COVID-19 has had an extraordinary influence on its operations. Globally, January growth was 4.6 percent, excluding Greater China, where COVID19 was already affecting results. Worldwide RevPAR climbed 3.2% in the first two months of the year, excluding Asia Pacific. Global RevPAR fell dramatically as the virus spread, and by April, it had fallen by around 90%. Currently, a fourth of our hotels globally are closed (Collins-Kreiner and Ram, 2020). Despite this, the company's present focus is on liquidity preservation. Until June 2024, Marriott has a $4.5 billion revolving credit agreement (Khalid, Okafor and Burzynska, 2021). By the 17th of March, it had withdrawn $2.5 billion to satisfy maturities on commercial paper. In an effort to conserve money, the company has reduced or eliminated share repurchases, halted the cash dividend, reduced personnel and other costs, and reduced investment spending. This is Marriott's last dividend, should the company's financial situation changes. It is due on March 31, 2020. Customers and other business partners are also contributing to the company's ability to stay afloat.

References

Abbas, J., Mubeen, R., Iorember, P.T., Raza, S. and Mamirkulova, G., 2021. Exploring the impact of COVID-19 on tourism: transformational potential and implications for a sustainable recovery of the travel and leisure industry. Current Research in Behavioral Sciences, 2, p.100033.

Bakar, N.A. and Rosbi, S., 2020. Effect of Coronavirus disease (COVID-19) to tourism industry. International Journal of Advanced Engineering Research and Science, 7(4), pp.189-193.

Beh, L.S. and Lin, W.L., 2021. Impact of COVID-19 on ASEAN tourism industry. Journal of Asian Public Policy, pp.1-21.

Caton, S., Hatton, C., Gillooly, A., Oloidi, E., Clarke, L., Bradshaw, J., Flynn, S., Taggart, L., Mulhall, P., Jahoda, A. and Maguire, R., 2022. Online social connections and Internet use among people with intellectual disabilities in the United Kingdom during the COVID-19 pandemic. New Media & Society, p.14614448221093762.

Cheung, C., Takashima, M., Choi, H., Yang, H. and Tung, V., 2021. The impact of COVID-19 pandemic on the psychological needs of tourists: implications for the travel and tourism industry. Journal of Travel & Tourism Marketing, 38(2), pp.155-166.

Collins-Kreiner, N. and Ram, Y., 2020. National tourism strategies during the Covid-19 pandemic. Annals of Tourism Research.

Foo, L.P., Chin, M.Y., Tan, K.L. and Phuah, K.T., 2021. The impact of COVID-19 on tourism industry in Malaysia. Current Issues in Tourism, 24(19), pp.2735-2739.

Khalid, U., Okafor, L.E. and Burzynska, K., 2021. Does the size of the tourism sector influence the economic policy response to the COVID-19 pandemic?. Current Issues in Tourism, 24(19), pp.2801-2820.

Papanikos, G.T., 2020. The impact of the Covid-19 pandemic on Greek tourism. Athens Journal of Tourism, 7(2), pp.87-100.

Rahman, M.K., Gazi, M.A.I., Bhuiyan, M.A. and Rahaman, M.A., 2021. Effect of Covid-19 pandemic on tourist travel risk and management perceptions. Plos one, 16(9), p.e0256486.

Simon, E., 2022. Marriott outlines COVID-19's 'unprecedented' Q1 effects. [online] Hotel Management. Available at: <https://www.hotelmanagement.net/operate/marriott-outlines-covid-19-s-unprecedented-q1-effects> [Accessed 12 May 2022].

Škare, M., Soriano, D.R. and Porada-Rocho?, M., 2021. Impact of COVID-19 on the travel and tourism industry. Technological Forecasting and Social Change, 163, p.120469.

Škare, M., Soriano, D.R. and Porada-Rocho?, M., 2021. Impact of COVID-19 on the travel and tourism industry. Technological Forecasting and Social Change, 163, p.120469.

Teeroovengadum, V., Seetanah, B., Bindah, E., Pooloo, A. and Veerasawmy, I., 2021. Minimising perceived travel risk in the aftermath of the COVID-19 pandemic to boost travel and tourism. Tourism Review.

Thurstan, R.H., Hockings, K.J., Hedlund, J.S., Bersacola, E., Collins, C., Early, R., Ermiasi, Y., Fleischer?Dogley, F., Gilkes, G., Harrison, M.E. and Imron, M.A., 2021. Envisioning a resilient future for biodiversity conservation in the wake of the COVID?19 pandemic. People and Nature, 3(5), pp.990-1013.

Usher, K., Marriott, R., Smallwood, R., Walker, R., Shepherd, C., Hopkins, K., Skeffington, P., Reid, C. and Jackson, D., 2020. COVID-19 and social restrictions: The potential mental health impact of social distancing and isolation for young Indigenous Australians. Australasian Psychiatry, 28(5), pp.599-600.