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Impact of COVID on hospitality industry in Pakistan

Saba Amin

Hospitality industry is one the most significant areas of the services sector. The Pakistan tourism and hospitality has tremendous potential. Tourism contributed nearly 7.1 % to the gross domestic products (GDP) of Pakistan in 2019. Its valued nearly at USD 20 Billion in 2020 and the market is expected to grow 1 trillion USD by 2025, and grow at a CAGR of 3% by 2026.

The COVID-19 had badly affected the tourism industry globally. According to the United Nations International tourism is expected to sustain loss of USD 50 billion dollars due to 3% drop in tourism as a result of outbreak of COVID-19.

Pakistan is evolving as a significant investment destination for new ventures in hospitality industry in terms of new hotel developments.Hotels in Pakistan are witnessing substantial increase in growth, in terms of average rate and occupancy and this trend is expected to continue further in upcoming years. The Government of Pakistan has also relieved visa policy, which has played a pivotal role in alluring a large number of foreign tourists. As per one of the researches approximately 60,070 foreigners have visited Pakistan in past 6 years in terms of tourist attractions. The enthralling places located in the northern parts of Pakistan being the top most amongst them. Ensuing the current government’s focus in developing the infrastructure   for the tourism industry in Pakistan and strategic policies devised to promote domestic and international tourism, the country expects to see a rise in the number of visitors by nearly 30% until 2030.

However, amidst the COVID-19 pandemic attack in Pakistan, the hospitality industry has witnessed huge losses and three out of seven top notch hotels in Karachi have closed since March 2020 due to pandemic. The industry is bearing the brunt of the virus as citizens have been restricted from travelling. PHA reports that Pakistan’s hotel industry lost 100 million alone in February 2020 due to drop of foreign guests. The booking rate declined from 95% on average to 40% by March 2020. Although the government is lately encouraging tourism by announcing lucrative packages, however amidst the COVID-19 outbreak in Pakistan efforts are seemingly to go in vain. The restriction for foreign travelers & international flights further acted as almost nail in the coffin thus derailing the government’s plans. Fighting all the odds, the hospitality industry is still optimistic and is positive to see the good times again soon. They are motivated as will weather this storm too.

The author is working in one of the Leading hotels of Pakistan in Islamabad & is pursuing her MS-MS from SZABIST-Islamabad






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