CHAPTER I

INTRODUCTION

1.1 Background of the study

Tourism is a social, cultural and economic phenomenon which entails the movement of
people to countries or places outside their usual environment for personal or
business/professional purposes (WTO, 2020). Millions of people throughout the world
travel from one place to another each year to travel exotic and new places, to recreate
themselves, or get the experience of the world. Tourism is one of the world’s fastest-
growing industries. It is a generator for employment, income, tax collections and foreign
exchange earnings. According to World Travel and Tourism Council (WTTC), tourism
accounted for 10.3% of global GDP and 330 million jobs, or 10.4% of total employment in
2019 (WTTC, 2019).

Nepal is a landlocked agricultural country having a mixed economy. Being multi-ethnic,

multi-lingual and multi-cultural nation, the prospect of tourism development is even at
higher side after the period. Nepal shares the border with China in the north and India in
the east, west and south. Nepal is well known for the land of visual paradise with
magnificent mountain range and multi ethnic groups. The Himalayan country Nepal has
more than ninety different languages spoken in the local community as being a multi
linguistic country. Hindu is the major religious group, so Nepal is also recognized as the
country of temple but also consists population of Buddhists, Muslims, and Christians as
well. Once who visits this country of temple or one can say the mysterious land can find
the diverse geography with low land and the mighty Himalayas and the unique culture.

Tourism is one of the major sources of income for many countries in the world and which
also applies to Nepal, which is no exception. Tourism has been one of the major sources of
revenue in Nepal. This multi-cultural country is well known as an international arena and
as a prime tourist destination in the world due to rich the fauna and flora, exceptional
trekking routes, snow–fed rivers, wonderful lakes and welcoming people. And Nepal is not
only limited to its natural beauty but is also rich in cultural and religious diversity as well.
Having attention for the development in the tourism sector like facilities in transportation

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roadways, airways and railways, safety and security and modern means of communication
play a vital role in tourism development of Nepal. The country can get a huge benefit from
tourism industry by increasing the number of employment opportunities and generating
foreign currency, which contributes for overall development of the nation’s economy.

Nepal has great potential to become a top destination for tourists as the nation is famous
for its snowcapped mountains, abundant flora and fauna, exciting trekking routes and rich
cultural and religious diversity. Tourism has become one of the main income sources for
many developing countries like Nepal. It is one of Nepal’s largest industries. In Nepal,
tourism revenue in 2019 accounted for 6.7% of the country’s Gross Domestic Product
(GDP) and supported more than 1.05 million jobs, with the expectation of providing more
than 1.35 million jobs by 2029 (WTTC, 2019) . Nepal hosted 1.19 million foreign tourists
in 2019, and the ‘Visit Nepal 2020’ campaign, officially introduced on 1 January, 2020,
aimed to attract 2 million tourists, generate $2 billion and create thousands of new jobs, but
due the COVID-19, pandemic the campaign got canceled which has shattered the
hospitality and tourism related business sector.

Despite its economic and sociocultural viability, tourism is a very sensitive industry.
Several factors can easily influence the tourism industries such as natural disasters, wars,
civil unrest, strikes, political instability, epidemics, pandemics etc. Due to COVID-19,
tourism is such a highly affected sector and may remain affected in the long term, i.e.
approximately more than 1.5 years. The tourism industry of Nepal has faced several crises
in the past few years. The tourism sector of Nepal was hard-hit by catastrophic earthquake
& trade disruptions along the southern border in the year 2015. Similarly, COVID-19 is
another one of the disaster that the tourism industry of Nepal has to face at present.
COVID-19 has a significant impact on the economic development worldwide. Unlike any
other crisis event in the last few decades, COVID-19 has an extremely negative impact on
tourism. The travel restrictions imposed by many countries, social distancing, etc. led to
almost complete stoppage to the tourism industry. United Nations World Tourism
Organization (UNWTO) states that the international tourist numbers have fallen down by
28% in just first quarter of 2020 and the number have reached approximately zero since
April, 2020 in Nepal (UNWTO, 2020). Moreover, this pandemic forced Nepal to shut
down Visit Nepal Year 2020 (Poudel, 2020).

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According to World Health Organization (WHO), “COVID-19 is an infectious disease
caused by a newly discovered coronavirus”. The first case of COVID-19 was reported in
Dec 31, 2019 in Wuhan, China which was later declared as a pandemic by World Health
Organization (WHO, 2020). There have been 48,196,862 confirmed cases and 1,226,813
deaths due to COVID-19 as of Nov.6, 2020, globally (WHO, 2020). According to Ministry
of Health and Population Nepal (2020), there have been 1,88,883 confirmed cases and
1070 deaths as of November 6.

Situated at an altitude of 827 meters from sea level, Pokhara possesses climatic varieties,
contrast vegetations, various scenic Lakes, attractive gorge of Seti River and ranges of
snow-capped mountains. There are numerous attributes of Pokhara ranging from trekking
and travel along with other social and functional characters. Pokhara Valley and its
surroundings are not only equipped with unique natural phenomena like nine lakes (e.g.
Begnastaal, Nyureni, Gunde, Khashte, Rupa, Maidi, Dipang and Fewalake) and world’s
three highest mountains Annapurna I (8091m), Dhaulagiri (8167m), Manaslu (8164m) but
also various extraordinary and unlimited cosmic vibration like mild temperature, the
highest precipitation in Nepal (rainfall with 5600 mm/year or 222 inches/year), Seti-
Gandaki river- system, strange caves (e.g. Gupteshwar Mahadev cave, Mahendra cave,
etc.) and amazing falls (e.g. Davis fall) along with thrilling deep Seti Gorge with more than
500 meter underground flow. The huge socio-cultural diversity is another inevitable
mysterious attraction of tourism in Pokhara. The overall population of Pokhara has been
emerged out of numerous ethnic groups, a number of classes and creeds along with multi-
lingual, who follow different cultures, celebrate distinct festivals, perform a number of
rites and rituals and ultimately reflect the collective traditional lifestyles. These ethnic
communities have their rich demographic, cultural and religious features which are
institutionalized through the spiritual institutions like Buddhist monasteries and Hindu
temples.

Pokhara is a tourism capital of Nepal, attracting tourists from all over the world (Poudel,
2020). So, most of the tourism activities take place in Pokhara. Pokhara in central Nepal is
naturally gifted. It has become one of the world’s most attractive tourist destinations with
the perfect blending of the nature and unique Nepali culture. For tourists all over the world,
Pokhara is full of unlimited natural attractions, cultural beauties and biological diversities
which makes this place unmatched from any other touristic destinations of the world.
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There is no other place in the where one can see the spectacular view of Machhapuchhre
Mountain which is reflected in the water of Fewa Lake. The breathtaking view of
Annapurna mountain range can be seen from Pokhara as if it just few kilometers away. On
the top of that, two of the world’s top 10 highest mountains Annapurna and Dhaulagiri can
be viewed from the city. One can also watch sunrise from Sarangkot hill, do several
adventurous activities such as paragliding, bunjee jump, zip flying and visit World Peace
Pagoda at the same day. Additionally, Pokhara is a gateway to the best one of the best
trekking treks of the world such as Annapurna Circuit trek, Mardi trek, Poonhill trek etc.
These beautiful characteristics of Pokhara along with the warm hospitality of Nepalese
people makes Pokhara a destination to visit at least once in a lifetime.

Restaurants and Bar Association of Nepal (REBAN) states that there are approximately
500 registered restaurants in Pokhara. There are several types of restaurants including
Nepali, Newari, Thakali, Chinese, Korean, Japanese, Continental, Thai, Italian, etc. Some
of the restaurants offer live music while some also offer cultural dances along with tasty
foods and beverages. Almost every type of food from all over the world could be found in
Pokhara served by different types of restaurants here. The primary customers of these
restaurants are tourists which are both domestic and international. The outbreak of
COVID-19 and the government-imposed lockdown, these restaurants have been
completely shut down hence leaving major economic impact on tourism of Pokhara.
However, the relaxed lockdown and opening of few trek routes and adventure sports for
domestic tourists has shown signs of revival of tourism to a minimum extent (Tourism
activities resume in Pokhara, 2020). This research aims to identify the economic impacts of
COVID-19 in restaurant business of Pokhara.Also, the study focuses on the direct impacts
on sales of the restaurants. Similarly, it aims to find out the flow of customers and
satisfaction level of restaurant businesses with the current customer flow after termination
of lockdown by Nepal Government.

1.2 Objective of the Study

The general objective of the study is to analyze the impact of COVID-19 on restaurant
business in Pokhara. The specific objectives are as follows.

 To analyze the impact of COVID-19 on regular sales of restaurants in Pokhara.

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  To analyze the change in regular sales of restaurants of Pokhara compared to pre
COVID-19 pandemic.
 To analyze the influence of COVID-19 on operational activities of restaurants in
Pokhara.
 To analyze the cleanliness and sanitation practices adopted by restaurants in
Pokhara.
 To analyze the influence of COVID-19 on food delivery service of restaurants in
Pokhara.
 To analyze the level of satisfaction with customer flow after lockdown termination
in restaurant business of Pokhara.
 To analyze the response against announcement of lockdown as a measure to deal
with COVID-19 pandemic.
 To analyze the role of government for supporting restaurant business in Nepal.
 To analyze the perception towards impact of COVID-19 pandemic on restaurant
business in Pokhara.

1.3 Significance of the Study

This research primarily studies the economic impact of COVID-19 in restaurant businesses
of Pokhara. This research is for academic purpose. In future, it can be extended for more in
depth analysis. The sample size can be increased in future and more wide scope of this
research could be covered. Furthermore, this research can also be used as a literature for
related studies.

1.4 Literature Survey

COVID-19 disease is caused by Severe Acute Respiratory Syndrome Coronavirus 2

(SARS-CoV-2). In early 2020, after a December 2019 outbreak in China, the World Health
Organization identified SARS-CoV-2 as a new type of coronavirus. The novel coronavirus
disease was first identified in December 2019 in Wuhan, China. The outbreak has significantly
expanded across worldwide, leading the World Health Organization to declare COVID-19 as a
pandemic on 11th March 2020. The outbreak quickly spread around the world. This disease
was identified by WHO as a pandemic in March 11, 2020 (Astuti & Ysrafil, 2020).
According to WHO (2020), the COVID-19 virus spreads primarily through droplets of
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saliva or discharge from nose when an infected person coughs or sneezes. This disease is
more harmful to older people and people with underlying medical problems like diabetes,
respiratory diseases etc. However, most people will experience mild to moderate illness
(WHO, 2020). The COVID-19 pandemic has led to a dramatic loss of human life
worldwide and presents an unprecedented challenge to public health, food systems and the
world of work. As of February 15, 2021, the COVID-19 update of Ministry of Health and
Population (MoHP) (2021) published that Nepal Government has tested 2131330 citizens
through PCR out of which 273166 have tested positive; 2058 have lost their life and
269505 infected COVID-19 patients have already recovered.

The individual travel motives of the potential travelers represent one of the decisive
elements in the course of the travel decision (Bieger, 2008). Tourists are subject to certain
behavior before, during and after traveling. This is conceptualized as travel behavior. This
behavior is the direct result of interaction between certain personal and environmental
variables on a continuous basis. Various researchers have identified factors influencing
travel behavior of tourists such as variables motivating the tourist to travel, attitude of the
tourist, various situational factors and environmental factors which influence the personal
significance of the tourist. However, due to the almost endless variety of possible travel
destinations of modern tourism, potential travelers often make their choice for a
destination, primarily depending on the perception of feeling safe and secure at the
preferred destination (Kuschel & Schröder, 2002).

According to Sausmarez (2007) crises can be ranged in three time periods: Potential crises
are threats that might occur in the future. They are neither ascertainable, nor are they
already existent. Nevertheless, they have to be identified and considered in order to be able
to prepare accordingly for the case of an imaginary crisis becoming reality. A latent crisis
on the other hand is already occurring. It is a critical situation that is existent, but does not
yet have a measurable negative influence. Once a critical situation has turned into an acute
crisis, its destructive effect can be clearly perceived and measured. Ritchie (2004)
differentiates the speed of crises developing. Immediate crises do not allow for
organizations to prepare. Emerging crises develop slower, can be predicted and measures
can be taken by involved organizations. Furthermore, crises can be classified according to
their nature. Natural crises are those that are attributable to natural disasters or other
unpredictable, natural events. On the contrary, human-induced crises are catastrophic
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events caused by human beings. Since the cause of a human-induced crisis can in contrary
to natural crises not be blamed on inevitable events, this second type of crises creates a
significantly higher loss of image and loss of faith than natural catastrophes (Glaesser,
2003). Laws and Prideaux (2005) additionally proposed the local division of crisis
management: On a regional level, a crisis has effects on the region itself and potentially
also on the nation. On the national level, its effects are significant for the tourism industry.
Finally, on the global level, a crisis can have a significant impact on tourism flows. As
tourists seek for substitute locations whenever they perceive a destination as not being
safe, local crises can have an impact on the global tourism industry. Crises are of different
nature and crises are inevitable and their impacts do not leave the tourism industry
untouched (Kunwar, 2016). Tourism crises can influence the improvement of financial,
political, socio-social, and ecological spaces that can additionally influence demand and
flexibly in tourism producing and destination countries. Eid and Arnout (2020) highlighted
four different types of crises; 1) Economic crises: such as poverty, unemployment, loans,
etc; 2) Social crises: including the marriage crisis, divorce, marital infidelity, the housing
crisis and others; 3) Political military crises: such as the battle, strikes; and 4) Health
crises: such as disease, epidemics, and plague.

The world has been affected by several epidemics and pandemics in the past, yet a
pandemic of this nature and scale has never been experienced before (Gossling, Scott &
Hall, 2020). Scholars have identified the impact of various previous epidemics on the
economy and the tourism industry. The earlier studies have determined that such
pandemics have relatively less impact than the COVID-19 outbreak in 2020. The global
tourism has also been exposed to these types of crises previously. The Severe Acute
Respiratory Syndrome (SARS) outbreak (2003), the 2015 Middle East Respiratory
Syndrome (MERS) outbreak, Ebola outbreak (2014) are some of the recent examples of
outbreaks that led to decline in international arrivals (Mengaki, 2020). However, COVID-
19 is different and more threatening than the previous endemics and epidemics. An
endemic is something that belongs to a particular country, epidemic affects a large number
of people than endemics, whereas a pandemic is an epidemic that spreads over multiple
countries or continents (Jackson, 2020). So, the impacts of COVID-19 in the world is
definitely larger than other epidemics. The tourism industry has always been hardest hit by
pandemics, epidemics and plagues in the past (Mensah, 2020). The COVID-19 pandemic

7
has expanded across the world by creating shocks in almost all the industries due to the
restrictions, curfews, stay-home and work-from-home policies, and quarantines. As a result
of the health and economic crisis with the COVID-19 pandemic, the tourism sector got
severely affected.

Tourism industry is a very sensitive industry and gets easily affected by the smallest of
factors (Hung, Tseng & Patrick, 2007). Similarly, COVID-19 has the capacity to impact
the tourism industry to the highest limit possible as seen from its scale. Like any other
countries, the tourism of Nepal has also been severely affected by the outbreak. The
outbreak of COVID-19 pandemic has brought impact on almost all the sectors of the
economy, and it’s the major impact of this pandemic is faced by global tourism industry.
Tourism industry is gigantic, global business accounting for 10.4% of GDP and 10% of
global employment (Joppe, 2020).

Tourism is one of Nepal’s largest industries. Tourism revenue in 2018 accounted for 7.9%
of the country’s Gross Domestic Product (GDP) and supported more than 1.05 million
jobs, with the expectation of providing more than 1.35 million jobs by 2029 (Prasain,
2020). Nepal hosted 1.19 million foreign tourists in 2019, and the ‘Visit Nepal 2020’
campaign, officially introduced on 1 January, aimed to attract 2 million tourists, generate
$2 billion and create thousands of new jobs. On 23 January, the first case of imported
COVID-19 was detected in Nepal. In response to cases worldwide increasing
exponentially and amid growing public concern, the government suspended the ‘Visit
Nepal 2020’ initiative on 3 March. Shortly after the World Health Organization (WHO)
declared COVID-19 a pandemic on 13 March, the government suspended all permissions
for mountaineering expeditions and suspended all visas. Nepal has been affected adversely
by the pandemic, and its preliminary impact recorded 14.37% loss to Nepalese economy as
a repercussion of travel restrictions and flight cancellations (Shrestha, 2020).

The coronavirus COVID-19 pandemic is the defining global health crisis of our time
and the greatest challenge we have faced since World War Two. Since its emergence in
Asia late last year, the virus has spread to most of the countries.  Nepal, a landlocked
country aspiring to graduate from a least developed country status, stands highly
vulnerable to the unfolding COVID-19 pandemic. Heedful of its vulnerabilities, the
Government of Nepal has enforced a nationwide lockdown and activated its federal,
8
provincial and local level mechanisms to respond to the crisis. While there is an urgent
need to strengthen the existing health system to handle the situation in case of any
sudden surge of outbreak, standardize the quarantine facilities and provide immediate
relief to the most-affected, equally important is to help the country mitigate the socio-
economic impacts and prepare for a longer-term recovery. Nepal Government has
reported over 2.6 lakhs COVID-19 cases as of 4 January 2021 (UNDP, 2021).
Meanwhile, the secondary impact of the global pandemic is huge and it is already
taking a serious toll on an economy that relies heavily on remittances, imports fueled
by remittances, informal labor, and tourism revenues.

Despite recent progress and the government’s commitment to reduce the absolute poverty
rate to 16.7% from 18.7% last year, the World Bank forecasts that 31.2% of Nepalis are at
risk of falling into extreme poverty, primarily because of reduced remittances from
overseas workers, foregone earnings of potential migrants, collapse of the tourist industry,
job losses in the informal sector and increased cost of essential commodities, all as a result
of COVID-19 (World Bank, 2020). After months of unprecedented disruptions, the United
Nations World Tourism Organization (UNWTO) reported that the tourist sector begins to
revive in some areas, especially in the Northern Hemisphere. At the same time, travel
restrictions remained valid for most global destinations, and business tourism continued to
be among the most affected sector of all (World Tourism Organization, 2020). According
to Pariyar (2020), it will take two years to revive the tourism sector in Nepal and half of
the workers will lose their jobs due to COVID-19. However, the ease in lockdown and
restrictions have led to opening of few hotels, restaurants and trekking routes but it is still
not enough for the recovery of tourism and the restaurants and tourism businesses to run
properly and generate required revenue to be able to run business in future (Puri, 2020).

1.5 Research Methods

1.5.1 Research Design

This study is based on descriptive research design. A descriptive research is a research

method that describes the characteristics of the population or phenomenon studied. This
methodology focuses more on the “what” of the research subject than the “why” of the
research subject.The population for this study is restaurants of Pokhara which are

9
registered under Restaurant and Bar Association of Nepal (REBAN). There are 500
registered restaurants in REBAN, Pokhara.

1.5.2 Population and sample

According to REBAN, there are about 500 registered restaurants in Pokhara Metropolitan
City. The population sample size is 40. Convenience sampling method is used for
sampling. The respondents of this study are restaurant owners, managers, supervisors and
restaurant in-charges.

1.5.3 Instrumentation

This research instrument used in this study is a structured questionnaire. The questionnaire
is divided into two parts consisting of demographic characteristics and impact of COVID-
19. The questionnaire consists of 19 questions that will include 9 general information and
demographic characteristics questions, 6 multiple choice questions, 2 checklist questions
and 2 open-ended questions.

1.5.4 Nature and Sources of Data

The data taken for this study is quantitative in nature. Primary data is used in this study.
The primary data is collected through structured questionnaire.

1.5.5 Data Collection Procedures

The primary data is collected through structured questionnaire. The primary data is taken
by following proper COVID-19 guidelines. The data is collected through both physical and
online forms. 75% of the data is collected physically whereas remaining 25% of the data is
collected online through google forms. Similarly, 60% of the data was taken on the spot
whereas remaining were collected later after respondents filled up the questionnaire.

1.5.6 Data Analysis Procedure

The study has used descriptive tools such as frequency and percentage for analyzing the
impact of COVID-19 on restaurant businesses in Nepal. The data is tabulated and analyzed
using MS-Excel. Content analysis was used for analyzing open ended questions.

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1.6 Limitations of the study

 This study has adopted descriptive research design and data collection is mainly
based on structured questionnaire.
 The findings of this study cannot be generalized in larger population.
 This study has used non-probabilistic sampling design.
 This study is based on cross sectional design. Therefore, the changes in respondents
perception could not be addressed as in case of longitudinal study.

1.7 Organization of the study

This study has been divided into three chapters.

Chapter I: This chapter includes a brief background of the study, the objectives of the
study, literature review, research methods, and limitations of the study.

Chapter II: This chapter comprises analysis of data and results. The data collected after
processing have been presented using figures and tables are interpreted in this chapter.

Chapter III: This chapter consists of summary, conclusion and action implementation.

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 CHAPTER II

DATA PRESENTATION AND ANALYSIS

This chapter is concerned with data presentation and analysis, of the findings obtained
through the study. Quantitative data gathered from primary sources has been analyzed in
this chapter. Primary data has been gathered through structured questionnaires. Initially the
demographic data are presented, related to the respondents. Microsoft excel has been used
to analyze the collected data. Statistical calculation such as frequency and percentage have
been calculated using Microsoft excel. The findings are presented in tabular form after
being analyzed to facilitate reading and understanding.

2.1 Demographic characteristics

This section of the questionnaire covered the respondents’ age, gender, academic
qualification and job. Though not central to the study, the personal data helped
contextualize the findings.

2.1.1 Job title of the respondents

The questionnaire were provided to either owner, manager, supervisor or anyone who was
in charge of restaurants. Such respondents were chosen because of the nature of the study.
The sales data and operations related activities of the respective restaurant can be
accurately provided by the selected types of respondents only. Out of 40 respondents, 50%
of them were managers (20), 30% respondents were owners (12), 15% were restaurant
supervisors (6), and 5% were restaurant in-charges (2).

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2.1.2 Gender of respondents

Table 1
Gender of respondents
Gender Frequency Percentage
Male 38 95
Female 2 5
Others 0 0
Total 40 100

Table 1 shows the respondents who responded to the questionnaires. Out of 40 respondent,
38 were male which contributed to 95% of total respondents, 2 of the respondents were
females (5%). This implies that majority of respondents are male. This also implies that
majority of restaurants in Pokhara are either owned or managed by male and the
involvement of females in restaurant businesses and their management is very low. Out of
two female respondents, one of the restaurant was owner and the remaining one was a
manager.

2.1.3 Age of respondents

Table 2
Age of respondents
Age group Frequency Percentage
Less than 18 0 0
18-24 6 15
25-34 25 62.5
35-44 7 17.5
45-54 2 5
55-65 0 0
Above 65 0 0
Total 40 100

Table 2 present the age of the respondents who responded to the questionnaires. Out of 40
respondents, 62.5% were aged between 25 to 34 years (25), 17.5 were aged between 35 to
44 years (7), 15% between 18 to 24 (6) and 5% between 45 to 64. This shows that
majority(62.5%) of the people involved in restaurant business in Pokhara are younger aged
25-34 years as compared to other age groups.
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2.1.4 Academic qualification

Table 3
Academic Qualification
Academic Qualification Frequency Percentage
Below SLC 3 7.5
SLC 3 7.5
Intermediate 15 37.5
Bachelor 16 40
Masters 3 7.5
Above Masters 0 0
Total 40 100

Table 3 presents education level of respondents who responded to the questionnaire. Out of
40 respondents, 16 respondents (40%) possess bachelors degree, 15 respondents (37.5%)
possess intermediate education, and three respondents each possess (7.5% each) masters
education, SLC and below SLC level education. The respondents with the qualification of
higher education contributed to less than half which is only 47.5% of total respondents (19)
whereas 52.5% of the respondents (21) have secondary education or lower. The study
expectation was that the respondents with higher education would be more capable on
formulating strategies to cope with COVID-19 pandemic but the number of respondents
with higher education is less than 50%.

2.1.5 Restaurants time of operation

Table 4
Restaurants time of operation
Time of operation Frequency Percentage
Less than a year 2 5
1-5 years 18 45
6-10 years 13 32.5
11-15 years 4 10

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Above 15 years 3 7.5
Total 40 100

Table 4 presents the time of operation of restaurants of Pokhara Metropolitan City since
they opened. Out of 40 restaurants, majority of restaurants were opened between 1-5 years
(18) contributing to 45% of total restaurants. Similarly, 32.5% of restaurants have been
operating between 6-10 years (13). The data shows that majority of restaurants in Pokhara
have been opened in the last 10 years which is more than 75% of the total restaurants.
Table 4 indicates that 10% of the restaurants started to operate between 11-15 years.
Similarly 7.5% of the restaurant have opened for more than 15 years (3) and 5% of
restaurant have started their operation just within a year (2).

2.1.6 Number of employees in restaurant

Table 5
Number of employees in a restaurant
Employee Number Frequency Percentage
Less than 15 23 57.5
16-30 11 27.5
31-60 6 15
Above 60 0 0
Total 40 100

Table 5 shows the number of employees in the restaurants of those who responded to the
questionnaire. The data on the table 5 implies that majority of the restaurants employ less
than 15 people (57.5%). Similarly, 27.5% of the restaurants (11) have 16-30 employees in
their organization. Only 15% of the restaurants employ between 31-60 employees (6).
There are no restaurants who employ more than 60 employees.

2.2 Impact of COVID-19

2.2.1 Impact of COVID-19 on regular sales

Table 6
Impact of COVID-19 on regular sales
Impact on Sales Frequency Percentage
15
No impact 0 0
Major decrease 32 80
Slight decrease 6 15
Neither decrease nor increase 2 5
Increase 0 0
Total 40 100

The extent of impact of COVID-19 on sales of the restaurants of Pokhara is shown in the
table 6. Majority of restaurants have suffered major decrease in sales (32) which
contributes to 80% of total restaurants. However, not all of the restaurants have been
experiencing a major decrease in sales. 15% of the restaurants (6) have experienced a
slight decrease in sales and 5% of restaurants (2) have neither decrease nor increase in
sales.

The two restaurants with neither decrease nor increase in sales were asked about what was
the reason behind their sales being consistent with pre COVID-19 pandemic. According to
the respondents, they are comparatively older restaurants which have been operating for
more than 10 years and they have a large regular customer base and they still had less than
10% decline in sales which they do not consider much of decline. However, other three
restaurants operating for more than 10 years have experienced major decrease in sales. The
reasons behind this may be the other restaurants may have failed to acquire large regular
customer base.The data on the table 6 implies that neither of the restaurants have
experienced increase in sales.

2.2.2 Change in regular sales compared to pre COVID-19 pandemic

Table 7
Change in regular sales compared to pre COVID-19 pandemic.
Percentag
Percentage decline in sales Frequency e
Less than 5% 1 2.5
6-10% 1 2.5
11-20% 4 10
21-50% 10 25
Above 50% 24 60
Total 40 100

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According to the table 7, 60% of restaurants, the majority faced above 50% decline in
sales. 25% of the restaurants (10) reported 21-50% decrease in sales. Similarly, remaining
15% of the respondents stated that they had less than 20% decrease in sales.

2.2.3 Influence of COVID-19 on operational activities of restaurants

Table 8
Influence of COVID-19 on operational activities of restaurants
Change in operations Frequency Percentage
Lay off employees 25 62.5
Reduced restaurant hours 25 62.5
Cut shifts 10 25
Decreased food orders from suppliers 38 95
Redesigning menu 17 42.5
Offered unpaid leave to employees 17 42.5
Offered takeaway 23 57.5
Offered online food delivery 15 37.5
Change restaurant opening time 12 30

Table 8 shows the influence of COVID-19 on operational activities of restaurants.

According to the data, 95% of the restaurant (38) decreased food orders from their
suppliers since there is decline in sales in those restaurants. However, 5% of the restaurants
with neither decrease nor increase in sales as shown in table 2.6 have not decreased food
orders from their suppliers. Similarly, 62.5% of the restaurants reduced their restaurant
hours as well as reduced their number of employees in order to due to major decline in
sales. The above table implies that 42.5% of the restaurants offered unpaid leave go their
employees go compensate for their decrease in regular sales. 25% of the restaurant cut
shifts of employees to manage for the reduced restaurant hours. 30% of the restaurant
responded that they changed restaurant opening time and opened restaurant earlier than
they have before. According to the respondents, the reasons for opening restaurant earlier
and decreasing restaurant hours was the local government have prohibited them from
opening their restaurant till late hours so they had to open their restaurants earlier than
usual time in hopes of serving as more customers as possible to gain some sales.

The results from table 8 implies that 42.5% of the restaurants redesigned their menu to
compensate for the decrease in sales as well as to reduce food order from their suppliers.
17
The respondents further stated that they decreased the price on the menu to attract more
customers and decreased the items on the menu to balance the operating costs with their
current sales. 57.5 of the respondent restaurants stated that they started to offer takeaway
services and 37.5% of restaurants started to offer online food delivery through foodmood,
tatomitho and other online food delivery channels to expand their customers base in
hopes of increasing their regular sales.

2.2.4 Cleanliness and sanitation practices adopted by restaurants

Table 9
Cleanliness and sanitation practices adopted by restaurants
Cleanliness and sanitation strategies Frequency Percentage
Alter kitchen protocol 13 32.5
Sanitize table between guests 35 87.5
Provide hand sanitizers 40 100
Post signs 14 35
Sanitize commonly touched places more
often 29 72.5
Increase table gap 8 20
Compulsion of masks 40 100
Temperature check 18 45
Regular checkup for employees 1 2.5
Placed sanitizers at entry and exit point 31 77.5

The respondents were asked if they had increased their cleanliness and sanitation practices
in their restaurants due to COVID-19. 100% of the respondents stated that they had done
so. The respondents were further asked about the cleanliness strategies adopted by them in

18
order to reduce the transmission of COVID-19. Table 9 shows the cleanliness and
sanitation strategies adopted by the restaurants.

All of the respondents reported that they provided hand sanitizers to the customers as well
as made wearing a mask compulsory in order to prevent transmission of COVID-19.
87.5% of the respondents stated that they sanitize the tables between guests. Similarly,
72.5% of the restaurants sanitize the commonly touched places more often and 77.5% of
restaurants placed sanitizers at entry and exit points. The table 9 also states that 45% of the
restaurants checked temperature of customers and staffs before entering the restaurant
premises whereas 35% of the restaurants posted signs about sanitation. Furthermore,
32.5% of restaurants altered their kitchen protocol by increasing sanitation practices more
often and 20% of the restaurants increased their table gap to prevent COVID transmission.
Lastly, only 2.5% of the restaurant (1) stated that they provided regular checkups to their
employees.

2.2.5 Influence of COVID-19 on food delivery service

Table 10
Influence of COVID-19 on food delivery service
Impact on food delivery Frequency Percentage
Major increase 2 5
Minor increase 4 10
Not changed 7 17.5
Minor decrease 4 10
Major decrease 3 7.5
Do not offer 20 50
Total 40 100

(Food Delivery: COVID-19 - Research and Markets, 2021) states that there has been a
surge in demand for food delivery services with more people stuck at home due to the
COVID-19 outbreak, there has been a surge in demand for food delivery services in the
United States. Since dine-in is no longer an option, consumers are turning to delivery to
treat themselves during the days of social-distancing. The purpose of the question was to
find out if the COVID-19 pandemic has influenced the food delivery service of restaurants
in Pokhara in the same way or differently.

19
The restaurants were asked about the extent of impact of COVID-19 on their food delivery
service. The data from table 10 implies that only 5% of the restaurants experienced major
increase in food delivery service. 10% of the restaurants responded that there have been
minor increase in their food delivery services. Altogether 15% of the restaurants have
experienced increase in food delivery service. However 10% of the restaurants saw a
minor decrease in their food delivery service and 7.5% of the restaurants experienced
major decrease in their food delivery.

2.2.6 Satisfaction level with customer flow after lockdown termination

Table 11
Satisfaction level with customer flow after lockdown termination
Satisfaction level Frequency Percentage
Satisfied 17 42.5
Dissatisfied 19 47.5
Can’t Say 4 10
Total 40 100

Table 11 presents the satisfaction level of restaurant businesses with the flow of customer
after Government of Nepal decided to terminate lockdown in July 21, 2020. According to
the data, 42.5% of the restaurants are satisfied with the flow of customer which seems
reasonable response since some flow of customer is better than none at all. Similarly,
47.5% of the respondents stated that they are not satisfied with the flow of customer. 10%
of the respondents couldn’t answer whether they are satisfied or dissatisfied with the flow
of customers.

2.2.7 Lockdown as a measure to cope with COVID-19 pandemic

Table 12
Lockdown as a measure to cope with COVID-19 pandemic
Response on announcement of Frequency Percentage
20
 lockdown
Yes 0 0
No 35 87.5
Can’t say 5 12.5
Total 40 100

The respondents were asked about whether they agree on government announcement of
nationwide lockdown as a solution to cope with COVID-19 pandemic. Table 12 stated that
none of the respondents agreed about nationwide lockdown being solution to cope with
pandemic. 87.5% of the respondents didn’t agree on this statement. Among the
respondents who didn’t agree, few respondents reported that lockdown was necessary only
in highly affected areas rather than places like Pokhara which were not that much affected
as compared to others. Similarly, 12.5% of the respondents couldn’t answer whether they
agree or disagree with this statement.

2.2.8 Government roles for supporting restaurant business in Nepal

The respondents were asked about their opinion on roles that Government of Nepal could
play in order to support restaurant businesses in Nepal. Out of 40 respondents, only 33
respondents gave their opinion on this topic. The respondents’ responses on the role of
government in supporting restaurant business in Nepal have been listed as below.

 Opening restaurant with proper safety measures and without police intervention.
 Reduced loan interest during pandemic.
 Reducing tax to a reasonable level.
 Promoting foreign tourist offering new tourism packages.
 Provision of offering cheaper air tickets to foreign tourists during this pandemic
period.
 Reducing visa costs during this pandemic period.
 Provision of new employment policy specially for the pandemic affected ones.
 Government’s enforcement on maintaining proper safety measure such as
decreasing rent, extending bank loan payment time, provision of subsidy to tourism
activities.

21
  Local tourism promotion needed because of reduced number of foreign tourist due
to government restrictions because of pandemic threats.
 Provision of vaccination to all people phase wise prioritizing the most affected ones
such as front line workers.
 Government should help to restaurants regarding in compensating to contract
period, for example, extending contract period to another year.
 There is tax burden to the tax payers as they are supposed to pay tax to local,
provincial and federal governments. Therefore, government should help in this
regard - such as paying to only one government.
 Government should make a provision for those tourists who are stuck in Nepal due
to COVID-19 to return to their country safely.
 Respondents emphasize to open international flights and making prevision for
reopening restaurants as far as possible earlier.
 Government should organize tourism campaigns to reinstate tourism as before
COVID-19 soon.

2.2.9 Information on impact of COVID-19 pandemic.

Respondents were asked to provide some more information on impact of COVID-19. Only
28 out of 40 respondents provided answer on this question. The information provided by
the respondents regarding the impact of COVID-19 pandemic are listed as below.

 Living standard and lifestyle of people has been affected significantly.

 Daily wage workers have been affected most hard.
 Many people lost their restaurant-based jobs.
 About 30 % restaurants have been shut down during this pandemic,
 On the positive side, it has taught businesses to be prepared for another crises in the
future through the experience of this pandemic.
 Restaurant-based staffs morale have been decreased as they have been affected
most directly.
 Tourism based government revenue have been hit directly due to this pandemic.
 Increased fear among the people of COVID-19 transmission.
 Private sectors such hotels and restaurants are affected more than other business.

22
  Lack of accountability of government staffs.
 Lack of of proper COVID-19 induced disasters risk communication among the
people.
 Overall economy of the Pokhara has been been reduced severely as tourism
contribute to the economy to a greater extent.
 People are also suffering of mental health and depression problems.
 Business community has become more conscious on health and sanitation.
 Musicians working in restaurants are also have been affected most hard.
 Lack of medical support to the affected business community from the government.

2.3 Results

Some of the major findings of this study are listed below.

 Restaurant business management in Pokhara is found to be led by male by 95%.

 The age group between 25-34 years leads the management of restaurant business in
Pokhara with 62.5% owners, managers, supervisors and restaurant in-charges are in
charge of restaurants which is followed by age group between 35-44 years with
17.5%.
 Only 47.5% of the people involved in restaurant business management have
academic qualification of higher studies. Remaining 52.5% have secondary-level
education or less.
 Large number of restaurants have been established during last 10 years contributing
to 82.5%.
 Majority of restaurants employ less than 15 people with 57.5% followed by 27.5%
of restaurants employing 16-30 employees.
 The impact of COVID-19 pandemic in sales of restaurants is huge since 80% of
restaurants in Pokhara have experienced major decline in their sales. However, 5%
restaurant had neither increase nor decrease in their regular sales.
 85% of the restaurants faced more than 20% reduction in their sales, which seems
quite closer to impact of COVID-19 on sales as mentioned above.

23
  95% of the restaurants decreased food orders from their suppliers as a result of low
sales due to COVID-19 which may be called as negative multiplier effect.
 Large number of restaurants (62.5%) fired their employees whereas 42.5% offered
unpaid leave to their employees as a result of COVID-19. This resulted in major
increase in unemployment.
 57.5% of restaurants started offering takeaway service as a new strategy to
establish more sales in order to compensate for the effect on regular sales. Similarly
42.5% of restaurants redesigned their menu with low food prices as other strategy.
 All of the restaurants increased sanitation and cleanliness practices such as using
hand sanitizers and making compulsion on face masks.
 The online food delivery service has only increased in 15% of the restaurants which
in not comparable to other countries like USA which has gained major increase.
 The number of restaurants who are either satisfied or dissatisfied with the flow of
customer after Government of Nepal decided to terminate nationwide lockdown is
equally split.
 Large number of restaurants (87.5%) don’t think that announcement of government
lockdown is solution to cope with COVID-19 pandemic since it has forced their
business to close and have major decrease in sales. Some of the respondents believe
that lockdown is only necessary in highly affected areas.
 While asked about the roles of government for supporting restaurants business in
Nepal, the respondents emphasized on following points:

i. Reduced loan interest during pandemic.

ii. Reducing tax to a reasonable level.
iii. Promoting foreign tourist offering new tourism packages.
iv. Provision of offering cheaper air tickets and visa costs during this pandemic
period.
v. Provision of new employment policy especially for the pandemic affected
ones.
vi. Government’s enforcement on maintaining proper safety measure such as
decreasing rent, extending bank loan payment time, provision of subsidy to
tourism activities.

24
 vii. Local tourism promotion needed because of reduced number of foreign tourist
due to government restrictions due to pandemic threats.
viii. Provision of vaccination to all people phase wise prioritizing the most
affected ones such as front line workers such as health workers, police etc.
ix. Government should help to restaurants regarding in compensating to contract
period, for example, extending contract period to another year.
x. Respondents emphasize to open international flights and making prevision for
reopening restaurants as far as possible earlier.
xi. Government should organize tourism campaigns to reinstate tourism as before
COVID-19 soon.

 The respondents stated the following major impacts of COVID-19.

i. Living standard and life style of restaurant community has been affected
significantly.
ii. Daily wage workers have been affected most hard.
iii. Many people lost their restaurant-based jobs.
iv. About 30 % restaurants have been shut down during this pandemic,
v. Tourism based government revenue have been hit directly due to this
pandemic.
vi. Increased fear among the people of COVID-19 transmission.
vii. Private sectors such hotels and restaurants are affected more than other
business.
viii. Overall economy of the Pokhara has been reduced severely as tourism
contribute to the economy to a greater extent.
ix. People are also suffering of mental health and depression problems.
x. Business community has become more conscious on health and sanitation.
xi. Musicians working in restaurants are also have been affected most hard.

25
26
 CHAPTER III

SUMMARY, CONCLUSIONS AND ACTION IMPLICATIONS

3.1 Summary

This research was conducted at several restaurants of Pokhara Metropolitan Municipality.

The restaurant business management in Pokhara is found to be led by male with age group
between 25-34 years. About 47.5% of the people involved in restaurant business
management have academic qualification of higher studies. The number of restaurants
have increased largely in the last 10 years with more than 80% of the restaurants
established in these years.

This research aimed to present the economic impacts of COVID pandemic on restaurants
of Pokhara Metropolitan City.The findings of this study reveals that more than 80% of the
restaurants are severely affected by the pandemic. Their sales have decreased by more than
50% as compared to pre-pandemic sales. The impact on these restaurant has further
affected other businesses such as food and beverage suppliers. Since, restaurants have
decreased their food and beverage orders from these suppliers, their sales have also
decreased significantly.

The economy of Pokhara heavily relies on the tourism employment to thousands of people
and the restaurant business are a major part of it. The tourism sector was hit harder than
other sectors of business in case of Pokhara. Since the COVID has forced restaurants to lay
off employees as well as forced unpaid leave, many people have lost their source of living
including restaurant waiters, cooks, musicians, etc. Thus, the pandemic has created a great
unemployment problem in Pokhara. Similarly, many restaurants have been forced to shut
down after they are unable to deal with economic burden caused by the pandemic. On the
bright side, restaurant businesses have become more conscious on health and sanitation
issues thus improving their quality of services. Moreover, this pandemic has taught the
local tourism sector as well as businesses to be ready for similar crises in the future.

When lockdown was lifted by Nepal Government, restaurants began to continue their
services following cleanliness and sanitation protocols such as providing hand sanitizers,
compulsion of mask wearing, temperature check etc. Similarly, to minimize the reduction
27
in sales, restaurants have adopted several strategies. Such strategies includes redesigning of
menu with decrease in price, offering takeaway and online food delivery services.

The number of restaurants who are either satisfied or dissatisfied with the flow of
customers after termination of nationwide lockdown the responses was more or less the
same. Large number of restaurants (87.5%) don’t think that announcement of government
lockdown is a solution to cope with COVID-19 pandemic since it has forced their business
to close down and have major decrease in sales. Some of the respondents believe that
lockdown is only necessary in highly affected areas.

The respondents believe that governments could play several important roles to support
restaurant businesses in this time. First off all government could make policies regarding
employment programs, tax reduction, decrease interest on loans, decrease rent, providing
subsidy, vaccination plans etc. to support businesses in this pandemic. Domestic tourism
should be encouraged firstly to pick up tourism pace after pandemic. The research also
indicated that government should organize several tourism campaigns to reinstate tourism
growth after pandemic. Furthermore, decreasing visa fees, flight costs etc. could also help
to attract more foreign tourists after pandemic.

3.2 Conclusions

This study evaluated the impact of COVID-19 on restaurant businesses in Pokhara.

Restaurants are the major part of tourism industry. They provide food and beverage
services along with other intangible factors to the tourists such as ambience, hospitality,
entertainment, culture etc. The results of this study shows that COVID-19 pandemic has
severely affected restaurant business of Pokhara with more than 50% decline in sales in
most restaurants. Findings also show that many restaurant-based employees have lost their
jobs due to this pandemic. The tourism multiplier from restaurant businesses due to
COVID-19 has further affected the restaurant suppliers and their revenue.

Although, restaurant businesses have increased their sanitation and cleanliness practices
and adopted several strategies to increase number of customers and sales, it doesn’t seem
to be working properly. Vaccination should be provided to every people of the country as
soon as possible. This will help to reduce fear of transmission among people and things
will go back to normal faster thus giving momentum to domestic tourism. Nation wise
28
lockdown seemed to be effective and reasonable in the initial stage, it didn’t seem to be a
good measure for tourism and its related businesses in the later stage.

The policies of Government of Nepal as well as local government does not seem to be
effective enough to revive restaurant businesses in Pokhara soon enough. For this, the
REBAN along with local, provincial government and central government, NGOs and
INGOs should work together effectively in policy and relief strategy platforms to help
these businesses overcome this pandemic and to revive the tourism of Nepal as well as of
Pokhara. Such initiation could be done through encouraging domestic tourism by
following proper safety and sanitation measures. In order to give momentum to tourism
and help tourism businesses like restaurant to survive in this pandemic, initiation through
domestic tourism is a must. It will help tourism of Nepal to gain momentum from its
crippling stage.

3.3 Action Implications

The study implies that the tourism industry and its business components such as restaurant
businesses is greatly affected by the outbreak, as expected. The first major practical
implication of this research is that it provides empirical data about the extent of decline in
regular sales and unemployment due to COVID-19 in restaurant industry of Pokhara along
with other specific negative impacts. So, these findings will be helpful for concerned
stakeholders such as REBAN, local government, provincial government as well as central
government to assess the level of impacts of the pandemic in order to make plans, policies
and strategies for dealing with these impacts.

A second implication of this study derives from our findings of the specific roles of
government that the restaurant businesses are expecting to overcome the negative impacts
caused by pandemic. This information is important given that researches regarding this
topic have not been done before. So, the findings of this study will allow policy makers or
government bodies to identify the roles they have to play as well as formulate appropriate
policies to support restaurant businesses in the study area in this pandemic.

29
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 Annex I
Tribhuvan University
Janapriya Multiple Campus
Bachelor of Mountain Tourism Management 6th Semester 2020/ 21
Questionnaire for the Field Survey

ECONOMIC IMPACTS OF COVID-19 ON TOURISM:

A STUDY OF RESTAURANTS IN POKHARA

My name is Ishan Giri. I am a student of Bachelors in Mountain Tourism

Management (BMTM) in Janapriya Multiple Campus and I am conducting a research
on “Economic Impacts of COVID-19 on Tourism: A Study of Restaurants in
Pokhara”. I would like to assure you that the response you provided for this research
will be kept confidential.

1. Name of the Restaurant: ___________________________________________

2. Address:_________________________________________________________

3. Name of respondent (Optional):_____________________________________

4. Job title of the respondent: _________________________________________

5. Age (in years):

Less than 18 18-24

25-34 35-44

45-54 55-65

Above 65

33
6. Gender:

Male

Female

Others

7. Academic Qualification:

Below SLC SLC

Intermediate Bachelor

Masters Above Masters

8. How long has your restaurant been in operation?

Less than a year 1-5 years

6-10 years 11-15 years

Above 15 years

9. How many people are working in your restaurant?

Less than 15 16-30

31-60 Above 60

10. To what extent COVID-19 pandemic has impacted regular sales of the
restaurant?

No impact Major decrease in sales

Slight decrease in sales Neither decrease nor increase

Increase in sales

34
11. If there has been decline in sales, what is the percentage of decline in regular
sales compared to pre COVID-19 pandemic?

Less than 5% 6-10%

11-20% 21-50%

Above 50%

12. How COVID-19 pandemic has influenced operational activities of your

restaurant?

Lay off employees.

Reduced restaurant hours

Cut shifts

Decreased food orders from supplier

Redesigning Menu.

Offered unpaid leave to employees.

Offered takeaway service

Offered online food delivery.

If others, Please specify, ______________________________________

13. Have your restaurant increased cleanliness and sanitation practices in your
restaurant after COVID-19 pandemic?

Yes No

14. What cleanliness and sanitation strategies were adopted in your restaurant to
cope with COVID-19 pandemic? (Check all that apply)

Alter kitchen protocol

35
 Sanitize table between guests

Provide hand sanitizer to guests

Post signs on cleanliness/sanitation practices

Sanitize commonly touched places more often

If others, Please specify,

__________________________________________________

15. How has food delivery service of your organization been influenced?

I have seen a major increase I have seen a minor increase

Food delivery has not changed I have seen a minor decrease

I have seen a major decrease I do not offer food delivery

16. What is your level of satisfaction with the flow of customer in your restaurant
after government has officially announced termination of lockdown in Nepal?

Satisfied with flow of customer Can't say

Dissatisfied with flow of customer

17. Do you think announcement of national lockdown is solution for coping with
COVID-19 Pandemic?

Yes No Can't Say

18. What role do you think Government of Nepal could play for supporting
restaurant business in Nepal? Kindly express your opinion below,

19. If you would like to share more information on impact of COVID-19 pandemic,
kindly express your opinion below,

36
37