Managing Hotels during Economic Challenges: A Case Study on Hotels in Sharm El-Sheikh and Hurghada, Egypt

Abstract

The tourism and hospitality industry in Egypt is suffering since 2011. This study comes to explore the impacts of economic downturn on the basis of hotels and investigate crisis management practices implemented by hotels. This research used questionnaire survey as a research method and sum of 107 forms were distributed on hotels' executives in four and five star hotels in Sharm El-Sheikh and Hurghada, among these 82 forms were valid. The results of the study showed that hotels were much influenced by the economic downturns in Egypt reflected in a variety of aspects: high drop in occupancy percentages, fall in hotel sales and decline in tourist arrivals. The findings revealed that focusing and marketing hotel services to new segments, reducing employees' wages and emphasizing cost reduction in all business activities were among the most highly ranked and implemented measures by hotels. The study highlighted statistical significant differences occurred between four and five star hotels across some investigated crisis measures. The study stressed on the great importance of government support to assist hotels in times of economic challenges and concluded with a List of 32 practices for hotel operators to manage their businesses during economic crisis concentrating on four main dimensions: marketing, workforce, cost control and responsible bodies support.

Crisis Management Practices in Tourism SMEs During the Covid-19 Pandemic

“…As noted by Alonso-Almeida et al 2015, in practice, crisis management is concerned with a mix of reactive and proactive strategies. Radwan (2017) asserts that crisis management remains insufficiently explored and highlights the necessity of further investigations into how to better cope with different crisis situations.…”

“…This is important, because significant reduction of rates during crises could have a destructive impact on the tourism industry after the economic downturn, as it might boosts guests' price sensitivity and lead to price wars among tourism providers. According to Radwan (2017), the branded providers of luxury services should be particularly careful before discounting and lowering the quality of their services, as this practice could influence their image and market position in the long term. Despite the fact that, generally, price reductions present a major threat to tourist firms' and destinations' long-term competitiveness and economic survival Smeral, (2010), Blažević and Drvenkar (2011) reported that during the GFC, Croatian TA lowered the prices of the Adriatic-Sea arrangements by up to 30%.…”

“…The authors proposed that the following measures be implemented by hoteliers: development of a crisis management plan, crisis market segmentation, intense marketing promotion, and staff management plan. Radwan (2017) thoroughly analysed the response of the Egyptian hotel industry to the GFC and assembled a list of 32 practices for managing hotel businesses during the crisis, concentrating on four dimensions: marketing, workforce, cost control, and responsible bodies support.…”

“…Only the study by Alonso-Almeida and Bremser (21 CMPs), does not include specific practices related to the dimension governmental and/ or organizational support, which is included in Kukanja and Planinc's study (19 CMPs) and Radwan's research (32 CMPs). The study by Radwan (2017) offers probably the most comprehensive selection of operational CMPs for the tourism industry.…”

“…After the literature review, primary data were collected using an online questionnaire. The design of the questionnaires was based on the study of Radwan (2017). An exploratory factor analyses (EFA) was performed to investigate the implementation of CMPs, and the Kruskal Wallis H test and the Wilcoxon Mann-Whitney U test were conducted to analyse the differences in CMP usage among the different types of SMEs.…”