The COVID-19 outbreak is becoming a global stress test. As the number of people infected with the virus continues to rise around the world, uncertainties about global economic growth increase. The first outbreak started in China and, after more than 1 month of unprecedentedly strict prevention and control measures, the epidemic has been essentially brought under control. Now the whole nation’s focus is shifting to the recovery of normal ways of serving hotel guests and normal lifestyles. Even as the outbreak subsides, there are some major short- and long-term effects the Chinese hospitality industry is feeling, which will carry over to other countries.

For many of the infected regions, the economy will fall sharply in the short term, and then rebound after the epidemic is over, but COVID-19 is unlikely to have a huge long-term impact.

Most recent published STR hotel performance metrics for different regions of the world indicate a negative trend and show that hotel business had slowed down drastically. As outbreaks continue to unfold around the world, external demand falters, further hampering recovery.

In the long run, the establishment of information chains will further enhance the resilience of feeder markets. Key information about customer groups, logistics, and room inventory in the supply chain can easily be grasped, analyzed and shared to improve overall supply chain management. At the same time, market demand can be tracked and predicted more dynamically, and room production rhythms can be adjusted accordingly. All this needs to be part of a wider digitalization push from the hospitality industry to deal with the next crisis.

For hospitality enterprises, the epidemic has simply exposed problems and risks that already existed. As such, it might force industry to undertake much needed reforms to automation, digitalization and processes, and systems.

For hospitality enterprises, the short-term impact of the epidemic is a decline in revenue and profits. For example, under China’s stringent prevention and control measures, a large number of hospitality related enterprises were completely suspended. In addition, recovery cannot be achieved overnight, and the resumption of work may also face difficulties in the form of recruitment problems, an insufficient supply of raw materials, and other issues such as logistics and cash flow. Operating costs will also clearly remain high during this period, further eroding profit.

The COVID-19 epidemic has brought unexpected difficulties and challenges to governments, industries and enterprises around the world. But it is a short-term effect and it will eventually pass. In the long run, COVID-19 is a chance for the hospitality industry to make much-needed operational improvements.