The Financial and Economic Impact of COVID-19 on the Micro, Small, and Medium-Sized Business Operating in the Hospitality Sector in Pakistan

The purpose of this survey was to investigate the financial and economic impact of COVID-19 on MSMEs operating in the tourism sector in Pakistan. The survey was carried out in October 2020 and shared with non-members and members of the KPK Chamber of Commerce. The questionnaires were aimed to assess the outbreak consequences from an operational and financial point of view, by comparing the results in August 2020 with August 2019. 204 total responses were obtained and analyzed. The findings revealed that over 55% of companies operating within the tourism and hospitality industry have already closed some of their shops or outlets. 80% of the respondents disclosed that their profit is turning into loss due to revenue decrease as compared tothe previous year 2019. While a majority of the respondents were not prepared for this uncertain situation. This study deduced three major findings. First, the hospitality industry is uniquely unorganized in Pakistan, with various intrinsic limitations contributing towards dissemination of incorporated SMEs, lower level of functional expertise, and lack of financial strength. Secondly, the limitations occur due to the lack of communication between the tourism industry and, which hamper the growth of the tourism sector, and thirdly, there is no central level strategy among provinces to promote the hospitality industry to the national level.