key: cord-1036443-693jld4e authors: Mohammed Said Al‐Mughairi, Habiba; Bhaskar, Preeti; khalfan hamood Alazri, Abdullah title: The economic and social impact of COVID‐19 on tourism and hospitality industry: A case study from Oman date: 2021-11-09 journal: J Public Aff DOI: 10.1002/pa.2786 sha: f0ffe2e67909f68b07acdd991f601a41ad2aa490 doc_id: 1036443 cord_uid: 693jld4e The COVID‐19 pandemic has incurred a substantial economic and social impact around the world. Many sectors have been drastically affected but the tourism and hospitality industry was one of the hardest hit by the COVID‐19 outbreak globally. The coronavirus pandemic has caused direct losses of half‐billion Omani Rial to the tourism sector. This pandemic has also exacerbated the mental health of business owners of the tourism and hospitality industry in Oman. This research aims to investigate the economic and social impacts of COVID‐19 on the tourism and hospitality sector of Oman. The data was collected from business owners of micro, small, medium, and large size‐companies operating in the tourism and hospitality industry. A structured questionnaire was distributed and data collection was done from September 2020 to January 2021. The finding of the study reveals a negative economic and social impact on the tourism and hospitality industry of Oman due to the COVID‐19 outbreak. The economic impact includes financial loss, reduction in customer demand at a national and international level, disruptions in the logistics and distribution channels, ruined the relationship with suppliers, customers, and employees. The social impact included depression, irritation, anxiety, and stress among the business owners about the present and future conditions. This study has given valuable suggestion to mitigate the negative economic and social impact on the tourism and hospitality industry of Oman. The finding of the study will support the government to boost the tourism and hospitality industry in Oman. The COVID-19 pandemic has incurred a substantial economic and social impact around the world. Many sectors have been drastically affected but the tourism and hospitality industry was one of the hardest hit by the COVID-19 outbreak globally. The coronavirus pandemic has caused direct losses of half-billion Omani Rial to the tourism sector. This pandemic has also exacerbated the mental health of business owners of the tourism and hospitality industry in Oman. This research aims to investigate the economic and social impacts of COVID-19 on the tourism and hospitality sector of Oman. The data was collected from business owners of micro, small, medium, and large size-companies operating in the tourism and hospitality industry. A structured questionnaire was distributed and data collection was done from September 2020 to January 2021. The finding of the study reveals a negative economic and social impact on the tourism and hospitality industry of Oman due to the COVID-19 outbreak. The economic impact includes financial loss, reduction in customer demand at a national and international level, disruptions in the logistics and distribution channels, ruined the relationship with suppliers, customers, and employees. The social impact included depression, irritation, anxiety, and stress among the business owners about the present and future conditions. This study has given valuable suggestion to mitigate the negative economic and social impact on the tourism and hospitality industry of Oman. The finding of the study will support the government to boost the tourism and hospitality industry in Oman. COVID-19, economic impact, Oman, social impact, tourism and hospitality industry 1 | INTRODUCTION On December 31, 2019, the first case of deadly Coronavirus was reported in Wuhan, Hubei, China (World Health Organization, 2020). The deadly virus was transmitted to the whole world-giving rise to uncertain and unstable situation. As the pandemic spread across the globe, the Sultanate of Oman also became its victim. To mitigate the effects of the pandemic, the Omani government announced the first lockdown on April 10, 2020 and consecutively the lockdown was extended zone-wise based on the severity of COVID-19 cases. Many businesses were completely shut down, the stringent measure was announced for conducting business activities in selected sectors only, and the tourism and hospitality sector was not exempted from this regulation. The COVID-19 pandemic has incurred a significant economic and social impact around the world (United Nations World Tourism Organization (UNWTO), 2020). Many sectors have been drastically affected but tourism and hospitality industry was one of the hardest hit by the COVID-19 globally. A recent report by the World Association of Investment Promotion Agencies (IPAs) on May 2020, stated that sectors like hotels and restaurants and other travel and tourism-related services were among the top five vulnerable sectors during the crisis of COVID-19. IPAs reported that hotels and restaurants are affected by the pandemic by around 84% followed by other travel and tourism-related services by around 65%. This pandemic has exacerbated the condition of business owners of the tourism and hospitality industry (Gursoy & Chi, 2020; Hospitality Net, 2020; Qiu et al., 2020) . Similar to other countries around the world, Oman's tourism and hospitality industry also has been drastically affected economically and socially due to the COVID-19 pandemic. The COVID-19 has caused direct losses of half-billion Omani Rial to the tourism sector (Al Nasseri, 2020) . The revenues of 3-5 star hotels have reduced by 60.2% and hotel occupancy rates declined by 50.1%. Oman tourism and hospitality industry continue to face the stifling stemming in hotels, motels, guesthouses, travel booking agents, tour operators, event management companies, restaurant, café, and other tourism-related services. The continuous ban on the aviation industry with limited flight operational at the national and international level has made the catastrophic impact on allied business activities of the tourism and hospitality industry. COVID-19's economic impact on Oman tourism has resulted in more unemployment, reduced consumer purchasing power, and lowincome generation (Al-Hasni, 2021) . Likewise, economic impact, the social impact was staggering the owners on the survival of their business. Owners are stressed about future business activities as the tourism and hospitality industry is on the brink of collapse. Though, the Oman government took several initiatives to mitigate the economic and social impact of the tourism and hospitality industry by offering monetary and nonmonetary support to the business owners to sustain and survive their business. The Ministry of Tourism assured to provide a relief package for business owners, encouraged banks to invest in the tourism sector, restructured loans schemes for hotel investors, grants, incentives, facilities, introducing new financing policies (Oman Observer, 2020a Observer, , 2020b . Certainly, it is only the assurance, the losses are huge and still, no-good hope is seen among the business owners in this sector. Several researchers have investigated the economic impact on the hospitality and tourism industry but the social impact has not been investigated from the owner's perspective. This research aims to investigate the economic and social impacts of COVID-19 on the tourism and hospitality sector of Oman. This study will make a novel contribution through quantitative research by offering rich insights into the economic and social impact of the COVID-19 on the tourism and hospitality industry in Oman. The finding of this research will support the government to boost the on tourism and hospitality industry in Oman. Previous literature shows that world economies have been largely hit by COVID-19 outbreak irrespective of developed or developing countries (Alhassan et al., 2020; Alhassan et al., 2021; Alola & Victor, 2020; Balsalobre-Lorente et al., 2020; Del Chiappa et al., 2021; Fernandes, 2020; Gupta et al., 2020; Harris & Moss, 2020; Jones & Comfort, 2020a , 2020b Liu et al., 2021; Shapoval et al., 2021; Singh & Neog, 2020; Usman et al., 2020) . Researchers have analyzed the macroeconomic effect of the pandemic on counties, Mugaloglu et al. (2021) revealed that COVID-19 created huge uncertainty in Turkey thus reduced the investment expenditure significantly. Similarly, South Africa is on the verge of falling into debt trap as the pandemic has increased the cost of public finance in the country (Alhassan et al., 2021; Tseng, 2021) . As the death toll continuously increased, the stock market reacted adversely specially that of Britain, Russia, India, and China thus creating a situation of Global meltdown (Kharbanda & Jain, 2021) . The increased number of deaths due to the pandemic has a negative impact on the per capita income of the country, thus the pandemic has forced many counties toward negative economic growth (Alhassan et al., 2021) . The macroeconomic indicators like Gross Domestic Product, Foreign Direct Investments, Employment, Health care system of the world were also put on gloomy situation due to uncertainties resulting from forced lockdowns in order to safeguard from getting affected from COVID-19 (Balsalobre-Lorente et al., 2020; Idris & Oruonye, 2020) . The pandemic had put the complete world economy on hold, all the major sectors were adversely affected due to lockdown, apprehensions, Bangladesh (Naiem & Al, 2021) ; and China, Italy, Australia, and Las Vegas (Folinas & Metaxas, 2020) . The economic impact has been studied by several researchers from various perspectives (Crespi-Cladera et al., 2021; Debata et al., 2020; Gössling et al., 2020; Karim et al., 2020; Khalid et al., 2021; Kumar, 2020; Lim & To, 2021; Rakshit & Basistha, 2020; Siddiquei & Khan, 2020) . The advent of the COVID-19 crisis has made it critical for the researcher to identify the main factors that are affecting the tourism and hospitality industry (Zenker & Kock, 2020) . Zopiatis et al. (2021) have also reported similar key economic and social areas (human resource management, finance/economics education and research, marketing, microlevel (operations), macrolevel (destination) for understating the impact of COVID 19 on tourism and hospitality industry. Chen et al. (2020) proposed nine key themes including the effect on tourism, people's emotions, management of tourism and cultural venues, the position of the hospitality industry, national command and local reaction, tourism conflicts and remedies, corporate selfimprovement initiatives, government assistance, and postcrisis tourism product for analyzing the tourism and hospitality industry in China. Baum and Hai (2020) analyzed areas of Asia, Europe, and North America's hospitality and tourism and reported unprecedented negative impact during the pandemic. Davahli et al. (2020) conducted indepth literature review focusing on challenges faced by the hospitality industry where findings revealed the negative impact on revenue, job loss, change in the customer preferences, and decline in market demand. Owners have to pay fixed costs, which include rent, electricity, wages, and loan interests, but the continuous decline in the revenues was making it challenging for owners to sustain during COVID-19 scenario (Folinas & Metaxas, 2020; Pagano et al., 2020) . The financial stress and solvency concerns make it difficult for owners to pay debts due to COVID-19 (Benjamin, et al., 2020; Crespi-Cladera et al., 2021; Tomassini and Cavagnaro, 2020) . Because of the COVID-19 crisis, many companies have decided to terminate their employees or were asked to go on unpaid leave (Karim et al., 2020; Lucas, 2020) . The psychological effect on the owner is deepened, as they have to make indefinite layoff of the employee due to lack of clarity on their businesses returning to normal (Şengel et al., 2020) . The COVID-19 crisis has negatively impacted employee-organization relationships . Within this turbulent environment, owners were challenged to stabilize their business. Therefore, companies requested the government to provide bailout packages to survive for the short-term until the impact of COVID-19 decline (Nicola et al., 2020; Ozili & Arun, 2020) . Owners perceive that they have to shut down their business within 3 months and will not be able to return at pre-pandemic levels (Brizek et al., 2021) . However, there is an ambiguity on the survival of companies on short-term bailout packages (Bas & Sivaprasad, 2020) . A time span of more than 5 years will be required for tourism and hospitality to recover (Dua et al., 2020; Yoong, 2020) . COVID-19 has resulted in severe consequences and affected the socio-economic prosperity of many nations (Aneja & Ahuja, 2020; Gössling et al., 2021; Kumar et al., 2020; Nicola et al., 2020) . The abrupt halt of the economic activities made the future sustainability of the tourism and hospitality industry into a big question mark. This research examined the economic and social impact of COVID-19 on the tourism and hospitality industry in Oman. In this respect, a structured questionnaire was sent to business owners working in the tourism and hospitality industry of Oman. The questionnaire consisted of four sections; the first section included demographic factor and details of their businesses. The second section included the questions related to economic impact; the third section includes questions related to social impact; and the fourth section includes open-ended questions related to strategies for the future. The data was collected from September 2020 to January 2021 from micro (