An inclusive perspective on the management of service institutions along global risk in the context of overcoming the global financial crisis

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Pavlo Tychyna Uman State Pedagogical University, Ministry of Education and Science of Ukraine, Department of Finance, Accounting and Economic Security

AN INCLUSIVE PERSPECTIVE ON THE MANAGEMENT OF SERVICE INSTITUTIONS ALONG GLOBAL RISK IN THE CONTEXT OF OVERCOMING THE GLOBAL FINANCIAL CRISIS

Melnychuk Yu.M.

Анотація

pandemic hotel crisis management

Мельничук Ю.М. ІНКЛЮЗИВНИЙ ПОГЛЯД НА УПРАВЛІННЯ ЗАКЛАДАМИ ПОСЛУГ ВПРОДОВЖ ГЛОБАЛЬНОЇ НЕБЕЗПЕКИ В КОНТЕКСТІ ПОДОЛАННЯ СВІТОВОЇ ФІНАНСОВОЇ КРИЗИ

Уманський державний педагогічний університет імені Павла Тичини, Міністерство освіти і науки України, кафедра фінансів, обліку та економічної безпеки

Стаття «Інклюзивний погляд на управління закладами послуг впродовж глобальної небезпеки в контексті подолання світової фінансової кризи» присвячена основним інклюзивним напрямкам подолання фінансових ризиків, що виникли під час пандемії Covid-19. У статті розглядається значення та необхідність готельного бізнесу в культурній, соціальній та економічній сферах країни та світу. Існує паралель між розвитком готельного бізнесу та пандемією кризи в країні. Висвітлено проблеми, які виникли під час пандемії, загрози для бізнесу, наслідки, що призвели до фінансових втрат. Був врахований практичний інклюзивний досвід провідних світових готельних компаній. Досліджено економічні чинники впливу на стан готельного бізнесу та напрямки їх подолання. Надано структуровані управлінські пропозиції щодо подолання фінансових криз, подолання існуючих ситуацій, шляхи їх запобігання.

У праці застосовувалась сукупність методів дослідження, що становить методологію аналізу та організації основних публікацій, законодавчих актів та законів, а саме методи узагальнення, порівняння, хронологізації, аналізу та узагальнення. Особливістю дослідження стало використання «Пелюсткової» гістограми для відображення цифрового впливу пандемії COVID-19 на рівень виручки від реалізації готельних послуг.

У статті розглянуто актуальне питання врятування готельного бізнесу в період глобальних криз. Вирішено завдання дослідження управління закладами послуг впродовж пандемії Covid-19 в контексті подолання світової фінансової кризи. Використано світовий досвід проходження проблематики та інклюзивний досвід в нетипічних ситуаціях, що виникають при настанні глобальних криз, а саме Ковід-19.

Досліджено сукупність факторів, що впливають на діяльність готельного підприємства, здійснено системний поділ на внутрішні та зовнішні. Дано роз'яснення, що зовнішнє середовище організації - це сукупність елементів, які не входять до складу організації, але мають на неї певний вплив; до зовнішніх факторів, що впливають на діяльність готельних підприємств: постачальники, інфляційні процеси в країні, споживачі, законодавство країни, конкуренти, суміжні ринки.

Виявлено проблему відновлення та розвитку бізнесу підприємств індустрії туризму та гостинності в сучасних умовах, ускладнених пандемією Covid-19. Запропоновано тісну співпрацю та консолідовану діяльність між підприємствами галузі, пошук інклюзивних шляхів співпраці, одним із яких є створення комбінованих готелей. Така форма співпраці в індустрії гостинності підвищує конкурентоспроможність підприємств цієї сфери, дозволяє закривати та відновлювати середні та великі підприємства малого бізнесу, забезпечує їх подальший розвиток на національному рівні.

Ключові слова: менеджмент, Covid-19, пандемія, гостинність, готельні послуги.

Abstract

The article "Ап inclusive perspective on the management of service institutions along global risk in the context of overcoming the global financial crisis" is dedicated to the main inclusive areas of overcoming financial risks that arose during the Covid-19 pandemic. The article examines the importance and necessity of the hotel business in the cultural, social and economic spheres of the country and the world. There is a parallel between the development of the hotel business and the crisis pandemic in the country. The problems that arose during the pandemic, the threats to business, the consequences that led to financial losses are highlighted. The practical inclusive experience of the world's leading hotel companies was taken into account. The economic factors affecting the state of the hotel business and the ways to overcome them have been studied. Structured management proposals for overcoming financial crises, overcoming existing situations, and ways to prevent them are provided.

The work used a set of research methods that constitute the methodology of analysis and organization of the main publications, legislative acts and laws, namely the methods of generalization, comparison, chronology, analysis and generalization. A feature of the study was the use of the "Petal" histogram to display the digital impact of the Covid-19 pandemic on the level of revenue from hotel services.

The article deals with the urgent issue of saving the hotel business in the period of global crises. The task of researching the management of service institutions during the Covid-19 pandemic in the context of overcoming the global financial crisis has been solved. The world experience of solving problems and inclusive experience in atypical situations that arise when global crises, namely Covid19, are used.

The totality of factors influencing the activity of the hotel enterprise was studied, and a systematic division into internal and external was carried out. It is explained that the external environment of the organization is a set of elements that are not part of the organization, but have a certain influence on it; to external factors affecting the activity of hotel enterprises: suppliers, inflationary processes in the country, consumers, the legislation of the country, competitors, adjacent markets.

The problem of recovery and business development of enterprises in the tourism and hospitality industry in modern conditions complicated by the Covid-19 pandemic has been identified. Close cooperation and consolidated activities between enterprises of the industry, search for inclusive ways of cooperation, one of which is the creation of combined hotels, are proposed. This form of cooperation in the hospitality industry increases the competitiveness of enterprises in this field, allows closing and restoring medium and large small business enterprises, and ensures their further development at the national level.

Key words: management, Covid-19, pandemic, hospitality, hotel services.

Introduction

Hospitality is an important component of the services sector of Ukraine and the world. Its effective functioning is an indicator of positive changes in the economy of each state, an important prerequisite for the intensification of international relations and integration of the country into the world community. However, almost all hospitality institutions are facing new challenges, the most important of which, at the moment, is to adapt to work in a pandemic.

The Covid-19 pandemic has led to a decline in services, which has seen the closure of many hotels, restaurants and other hospitality establishments. Governments are closing borders, canceling flights, restricting transportation, which hinders the movement of tourists, both within Ukraine and between countries, and leads to their internal isolation.

The current situation is forcing the hotel and restaurant business around the world to adapt as quickly as possible than other areas of business. The task of enterprises is to restructure business processes and quickly reduce costs. The extreme measures that companies have to resort to are maximum savings, reduction of operating costs, rejection of outsourcing services, reduction of employees' working hours, reduction of wages, rental vacation for the quarantine period, suspension of investment plans.

As the hotel business is closely linked to other areas, its support is very important because this industry fuels many other companies that provide cleaning and security services that produce and supply food, develop software, maintain engineering systems and etc. [1].

Therefore, the question of how to keep your business after a pandemic is the most pressing.

Today, during the pandemic, an important area of activity for the hotel industry is the introduction of effective security measures and improving the quality of hotel services.

Setting objectives

The question of saving the hotel business in the period of global crises is becoming extremely urgent. That is why the study of the management of service institutions during the Covid-19 pandemic in the context of overcoming the global financial crisis becomes an important task. The use of global issues and inclusive experience in atypical situations that arise when global crises occur, namely, Covid-19.

Some aspects of the functioning of the hotel industry are considered in the scientific works of domestic and foreign authors: S.I. Baylik, V.A. Azara, R.A. Braimer, O.P. Durovich, M.I. Kabushkina, V.I. Karsekina, V.A. Kvartalnova, N.M. Kuznetsova, Yu.M. Melnychuk, G.A. Papiryana, T.I. Tkachenko, A.D. Chudnovsky, D. Walker, V.K. Fedorchenko, T.A. Dyorova and others.

However, they do not cover the fundamentally important issues related to a comprehensive study of the hotel industry and scientific substantiation of problems and prospects of the hospitality industry, do not develop priorities and objectives of their economic stability for the crisis in the economy, especially when it comes to pandemic. Therefore, the study of problems and prospects for the development of the hotel business during the pandemic is very relevant and necessary for the development of the services market.

According to Waliszewski K., the development of strategies for the development of the hotel industry is due to the need to study, first of all, the regional features of the formation and operation of the product of the hotel industry. It is important to study, and as a consequence, the rational use of natural and historical-cultural recreational and tourist resources of the region, as well as to take into account the factors of functioning of the existing subjects of the tourist industry of the region. This plays an important role in identifying the specialization of accommodation facilities [2].

The Crown Virus pandemic, for a number of obvious reasons, has caused a deep crisis in the hotel business. Among them - the introduction of lockdowns, technical closure of hotels, almost complete suspension of international flights, reducing the number of flights within the country, the lack of both foreign and domestic tourism, reducing to a minimum the number of business meetings. As a result of all these measures, scientists Y. Zemlina & O. Lifirenko, there is a sharp decline in demand for hotel services to a critical level, complete or partial closure of hotels. The pandemic has become a stress test, having a serious impact on the labor market as a whole and on management decisions in organizations in each industry. The importance of the personnel management system of the hotel industry here comes to the fore and a significant element in the management system of any company in crisis years is its personnel policy [3].

The coronavirus pandemic has caused serious damage to the hotel business in Ukraine, and it may take more than a year for the sector to recover. This explains the objective emergence of control and assistance organizations during the crisis. The Association of Hotels and Resorts of Ukraine (UHRA) is a public organization that unites accommodation establishments and companies working in the hotel industry for their sustainable development. The association represents the combined position and interests of hotels in the domestic and foreign markets [4].

Despite the large amount of scientific research in the field of hotel services, the issues of conducting business in times of global crises are not sufficiently studied, so our task is to deepen research in the direction of managing service establishments during the Covid-19 pandemic in the context of overcoming the global financial crisis.

Research Results

The hotel industry is now one of the world's worst affected by the Covid-19 outbreak. The rationale is a type of travel industry that is based directly on the human-to-human formula, which is extremely vulnerable to international crises, and that is why:

- the closure of the country's borders, restrictions and bans on movement have led to a halt in the tourism sector;

- the whole sector is stopped, starting with the largest airline and ending with the smallest hotel in the countryside;

- this impact is both economic and social in nature, affecting the livelihoods of tourism workers, transport and suppliers, as well as their families and entire communities [5].

The main trends in the hotel industry include a decrease in the number of hotels due to the economic crisis, a decrease in the number of customers, as well as rising prices for services. As for development opportunities and strengths, they are an important basis for the development of the hotel business in Ukraine.

According to the study, 93% of hotel owners confirmed the overall decline in revenue of their hotel, in 21% of hotels gross revenue decreased by 25-40%, in a third of hotels - by 40-60%, in 30% of hotels such reductions reached more than 60%, only 4% of hotels showed an increase in annual revenue, and in 3% it remained at the same level Fig. 1.

Fig. 1 Impact of the COVID-19 pandemic on the level of revenue from the sale of hotel services [5]

The survey involved 122 hotels with an average of 72 rooms. In Ukraine, according to 2019, there are a total of 3,165 hotels and motels, excluding hostels, sanatoriums and dormitories.

Such institutions optimized their costs by 66%, reducing staff, 2/3 reduced prices for their services, 63% of respondents improved their product and services (repair, repositioning, updating standards and conditions with suppliers, changing equipment, etc.), 1/3 respondents introduced digital and marketing tools, 27% introduced alternative services (coworking, renting rooms for offices, etc.), 7% decided to repurpose some of the premises, for example, for rent for gambling establishments.

In the world, losses in the field of tourism amounted to about 800 billion dollars, in Ukraine it is about 60 billion hryvnias, which the industry has lost over the past year. In the budget we have, which is 100 million hryvnias, we envisage a significant part to finance the creation of a single tourist register, in which we will be able to register all accommodation and other resources of business entities, obtain relevant statistics and have operational data on a monthly basis. To properly plan marketing activities and attract investors to the industry.

The greatest prospects of the hotel sector of the region has the evolution, modernization and development of existing hotel enterprises in the region. The main prospects for the development of the hotel industry in the region include: Updating and improving the legal and regulatory framework for relations in the hotel industry, creating programs to encourage Ukrainian and foreign investors to develop the hotel industry, and creating new jobs to form a high-income industry. Simplification and harmonization of different types of state control.

In order to manage the development of the hotel industry in Ukraine, local executive authorities and local governments need to:

- develop and approve local programs for the development of the hotel industry, encourage local entrepreneurs to create hotel businesses, especially campsites, hostels, motels. Minimization of taxes in the first years of operation;

- to form separate structural subdivisions on development of hotel economy of all levels;

- to provide cooperation with various subjects of tourist activity, to actively involve hotel enterprises in the organization of fair and exhibition events.

In order to manage and intensify public-private partnership, it is necessary to carry out joint efforts of both business and government. Successful development of the tourist and hotel product requires support, restoration, reconstruction, restoration of existing facilities in each of the areas of the concept of "location - buildings, historic sites-places of transport", as well as the creation of new attractive facilities [6].

The hotel business in Ukraine is characterized by dynamic development and is becoming an important factor in the cultural and economic progress of the country. Trends in the current development of the economic situation in Ukraine are characterized by positive dynamics, intensification of structural changes in favor of services, intensification of competition [7].

A significant push towards the development of hotel infrastructure took place during the period when Ukraine was preparing for EURO 2012, which was motivated by the need to represent Ukraine with dignity at the international level and provide guests with places to relax with proper conditions and comfort. Currently, a distinctive feature in the hotel services sector is the increase in the number of small hotels and apartments that offer their services in both small and large cities that have already received the status of tourism centers (Kyiv, Lviv, etc.). The creation of small hotels, according to scientists, can help solve many problems related to the planning and location of the hotel base, improving the quality of service and more. In order to support the hotel business among entrepreneurs who have created and provide hotel services in small hotels and apartments, the All-Ukrainian public organization "Association of Small Hotels and Apartments of Ukraine" was established in Ukraine [8].

During the period when quarantine conditions were introduced in Ukraine, a number of normative legal acts were developed and adopted at the highest state level, in particular, the Cabinet of Ministers of Ukraine approved a resolution to amend the previously approved resolution on preventing the spread of acute respiratory disease Covid-19, caused by coronavirus SARS-CoV [9].

Given the best practical experience of the world's leading tourism countries, there are proposals structured in several main areas:

1. Safe distance.

2. Constant disinfection.

3. Individual protection and safety rules.

The average daily occupancy of the accommodation will not exceed 50% of the total number of beds, guests can be accommodated only in single rooms, except for groups of family members or guests who came together. In order to prevent congestion in public places and in order to prevent social contact, in particular at the "reception", in the lobby, near the elevators, in common toilets, the application of demarcation lines should be used. These demarcation lines must be at least 1.5 m apart. The elevator should be used alone, except for people from one group [9].

Competition between luxury hotels has led to further market segmentation, which was based on the principle of product differentiation. Regardless of where such hotels are located - content or outside - they focus on the personalization of the service; as for designer and boutique hotels, they have gained wide popularity, including due to the popularity among the stars and their fans [10].

Mini-hotels are becoming popular in the world, as well as renting an apartment every day. Such activities do not require many operations and certifications, usually one person, in addition to the main place of residence, owns an apartment or house, which is rented daily for additional income, which is considered a temporary settlement. In this case, the entrepreneur does not need a large number of employees, if desired, you can do all the work yourself, so it makes no sense to register as a legal entity, which is much more complicated, expensive and time consuming. It should be noted that there are different sized enterprises: large, medium, small, as well as micro-enterprises engaged in hotel and restaurant activities. Thus, the grouping of enterprises by type of economic activity and size, engaged in temporary accommodation and catering [6].

Recently, significant competition for the hotel industry and, in particular, large hotels, is created by individuals - business entities, which mainly maintain small hotels and own private houses and apartments, the number of which has been growing rapidly in recent years. They offer visitors a full range of basic and additional hotel services at a much lower cost. Weak support for hotel activities by the state, the problem of investment activity, seasonality of loading and uneven loading in the regions of Ukraine, the emergence of competition in the hotel market between hotel enterprises and individual non-hotel facilities, misuse of hotels, lack of reliable and reliable information about the market hotel services and the corresponding competition in this market further delays Ukraine's entry into the world tourist market [10].

Naturally, the hotel-restaurant type cares about meeting the needs of the target market in terms of its saturation and fierce competition in a rapidly changing market environment and diverse consumer demands [7].

The study of the internal environment is aimed at identifying the strengths and weaknesses of the organization. Strengths are the basis on which the organization relies in competition and which it must expand and strengthen. Weaknesses must be the subject of close management attention to get rid of them [11].

The hospitality industry is the hallmark of Ukraine, including Uman, and is an indicator of its socio-cultural and economic development. Its development is an important element of the integration of the Ukrainian tourist market into the European business and cultural environment. However, quarantine and the coronavirus pandemic have hit the tourism industry hard, destroying both national and global tourism markets. The global crisis based on Covid-19 has stopped development and made many adjustments to the work of enterprises in the national travel industry.

The set of factors influencing the activities of the hotel business can be divided into internal and external. The external environment of the organization is a set of elements that are not part of the organization, but have some influence on it. To the external factors influencing activity of the hotel enterprises:

1. Suppliers.

2. Inflationary processes in the country.

3. Consumers.

4. Legislation of the country.

5. Competitors.

6. Related markets.

As a result of the pandemic, significant changes took place in the organization of the domestic hospitality industry. According to the Association of the Hospitality Industry of Ukraine, no more than 5 million foreign tourists come to Ukraine every year, while the domestic tourist flow numbered more than 8 million people. During the quarantine, serious losses are suffered not only by hotel owners, but also by all others who take part in the reception of tourists, including restaurants, tourist information centers and tour desks. In large cities, such as Kyiv, Lviv or Odessa, the hotel business has had sufficient profits and will be able to survive quarantine and not go bankrupt. The main income of hotels was brought not only by foreign tourists, but also by Ukrainians themselves. Many institutions cooperated with business companies, held conferences and trainings, hosted sports teams and tour groups. However, in small towns, the tourism and hotel business faces big losses. Large chains of hotels with 70 rooms are closed for the period of quarantine, because they have a systemic business, and they will be able to continue their work after the conservation period. Small hotels will not be able to recover. However, according to the Order of May 18, 2020 № 32 "On some requirements for anti-epidemic measures to reduce quarantine", domestic hotels are not required to close for quarantine, but due to lack of tourists in most of them there is no other option [10].

Conclusion

Today, in order to make a profit and maintain the competitiveness of the organization, top management must optimize the return on investment of any resources: material, financial and most importantly - human. In turn, management in such circumstances should play a key role and be aimed at the efficient use of staff, optimization of income and expenses, achieving the goals of the organization.

A number of severe quarantine restrictions on travel (including the entry of foreigners), the lack of financial support for paralyzed workers, and global transformations in consumer behavior are all changing the shortand medium-term expectations of managers and hotel owners. Further, this leads to new waves of staff reductions, complete cessation of any innovations and new projects, which in turn further harms the industry.

The problem of restoration and business development of enterprises in the tourism and hospitality industry in modern conditions complicated by the Covid-19 pandemic requires close cooperation and consolidated activities between enterprises in the industry, finding new ways of cooperation, one of which is the creation of combo hotels. This form of cooperation in the hospitality industry increases the competitiveness of enterprises in this area, allows small businesses to close and recover medium and large, ensures their further development at the national level.

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