COVID 19 The pandemic and Price Volatility: An Analysis of Hospitality Industry in Emerging Market Economy - Case Study of Tanzania

  • Gloria A Ntacho Mzumbe University Tanzania
  • Seif Muba, PhD Mzumbe University Tanzania
Keywords: COVID 19 The pandemic, Price Volatility, Hospitality Industry, Emerging Market Economy, Tanzania, Demand, Supply Shifts
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Hotel industries have had the most impact in most of the countries as people went into lockdowns and quarantines as a result of the COVID-19 pandemic. The study aimed at assessing the degree of price change in relation to the profit of hotels before and during the COVID-19 pandemic. Tanzania has been considered to represent developing countries that have taken a different course in a fight against the pandemic. Price movement determines the reaction from customers and therefore performance. This study prepared to identify the knowledge gap on how supply shocks affecting prices of hotels caused by COVID-19 pandemic that are beyond control, especially on a developing country like Tanzania could have on the performance of hotels and whether the recovery of such recession can be predicted in the short run. Movement in supply, demand and management strategies were regarded as an indicator of the direction of the performance of hotels in Tanzania pre and during the COVID-19 pandemic period. The study adopted both qualitative and quantitative analysis for a period of two years, 2019 to 2021, for a sample of two hotels in Dar es salaam which are 5- star hotels. Focus group discussion was used as a way to collect data along with secondary data. The regression analysis has been adopted to analyse secondary data after considering the correlation between variables in the study. Performance of hotels was measured using daily demand generated in pre and during the pandemic period against changes in prices influenced by COVID-19 pandemic. The study found out that the influence of price movement during the pandemic period was not significant enough to have led to the deteriorating performance of hotels in Tanzania. However, hotel performance deteriorated as a result of other contributing factors such as a fall in occupancy rate, lack of markets and increasing additional costs to fight against the pandemic, supply shocks which led to a fall in efficiency. It was evidenced that this was highly triggered by the overdependence of hotels on foreign markets. Travelling restrictions and lockdowns cultivated the deteriorating performance in hotels even though Tanzania never went into lockdown. However, hotel management adopted measures to contain the impacts through various ways, such as cutting down costs and revising prices. The study concluded and recommended that Tanzania hotels management should adopt flexible strategies on pricing that would accommodate unprecedented events that are beyond the control of the market forces (demand and supply). This would enable management to have decisions that reflect the condition in the country and not get influence from companies within the group situated in other countries.


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23 November, 2021
How to Cite
Ntacho, G., & Muba, S. (2021). COVID 19 The pandemic and Price Volatility: An Analysis of Hospitality Industry in Emerging Market Economy - Case Study of Tanzania. East African Journal of Business and Economics, 4(1), 34-45.