Socio-Economic Adaptive Capacities of Hotels in Iloilo City: Reference for A Proposed Recovery Plan for Crisis Management

Socio-Economic Adaptive Capacities of Hotels in Iloilo City: Reference for a Proposed Recovery Plan for Crisis Management

¹Focbit, Brian P. ²Manalo, John Vincent I.

^1,2Iloilo State University of Fisheries Science and Technology National Research Council of the Philippines

DOI: https://dx.doi.org/10.47772/IJRISS.2025.9020219

Received: 04 February 2025; Accepted: 08 February 2025; Published: 12 March 2025

ABSTRACT

Crisis is deemed a critical factor to consider in managing and operating hotel businesses. This descriptive survey study was designed to determine the social and economic adaptive capacities among selected hotels in Iloilo City as the basis for a proposed recovery plan. This study was undertaken by pre-identifying the respondents who were directly involved in the hotel management and operations such as the managers, supervisors, and administrative staff employed in selected hotels. A selection criterion was used to select the respondents. A researcher-made instrument was utilized to gather the data needed. The gathered data were analyzed using both descriptive and inferential statistical treatments. The findings of the study showed that the level of social adaptive capacities was very high when taken as an entire group and when classified as to a. period of operation; annual income from tourism activities before the pandemic; annual income after the pandemic; and d. the number of people employed. Furthermore, the level of social and economic adaptive capacities did not differ as to the hotel characteristics. Based on the findings of the study, the following categories for recovery plan were formulated: 1) design contingency plan; 2) investment on human capital (training); and 3) risk assessment.

Keywords: Adaptive Capacities, Socio-Economic, Hotel Crisis Management, Recovery Plan

INTRODUCTION

Tourists are now shifting their preferences to Sustainable travel. Almost three-quarters (72%) of travelers believe that now is the time to act and choose responsible tourism to save the planet for future generations. Ecotourism is traveling to protected natural areas, with minimal impact on the environment. Ecotourism executes sustainability if it contributes to the conservation of natural resources, the well-being of the local people, and their source of income. According to Ferraro as cited by Vlado (2013), “the natural protected areas in Costa Rica have reduced poverty by 16% in neighboring communities, mainly by the thrust of ecotourism.” Through its value chain, the tourism industry has provided jobs to the formal and informal sectors. The said industry is an economic driver, especially in developing countries. The income generated from ecotourism also supports the conservation of the environment. Tourists pay local guides who educate them about nature. Most local people rely on ecotourism as their source of income due to their lack of economic opportunities. Over the last decade, Travel and tourism have been an important driver for job creation and a dynamic engine of employment opportunities. In 2019, the sector supported 334 million jobs (10.6% of all jobs) and was responsible for creating 1 in 4 of all net new jobs across the world between 2014-2019 (World Travel and Tourism Council [WTTC], 2021).

Milla, et al. (2022) cited that “the tourism industry was one of the key contributors to the sustained growth of the Philippine economy before the pandemic.” Most foreign travelers always find remarkable travel experiences in the country due to its climate, culture, geographical features, culinary products, and most especially, the Filipino hospitality. Hotels in Iloilo City are deemed the key players in contributing to the total experience of Ilonggo hospitality. The influx of international tourists who choose Iloilo City generated jobs. Iloilo City, known as for its famous festival, the Dinagyang Festival and its Ilonggo cuisine such as La Paz Batchoy, Pancit Molo, etc.

In 2020, the world reached a standstill when COVID-19 hit hard, and this virus outbreak did not exclude tourism. Many countries closed their entry points, and strict health protocols brought the reality that vacations were not happening. According to the UNWTO Secretary-General’s Policy Brief on Tourism and COVID-19 in August 2020, “as many as 100 million direct tourism jobs were at risk, in addition to sectors associated with tourism such as labor-intensive accommodation and food services industries that employ 144 million workers worldwide. Small businesses (which shoulder 80% of global tourism) were particularly vulnerable. “

According to the United Nations Policy Brief (2020), “As borders closed, hotels shut, and air travel dropped dramatically, international tourist arrivals decreased by 56 percent, and $320 billion in exports from tourism were lost in the first five months of 2020.” In a study conducted by Centeno and Marquez (2020), “an estimated earning loss of about Php170.5 billion in the tourism industry of the Philippines.” This means no income to feed the local people, to sustain environmental conservation, and there would be uncertainty in the tourism business.

With the disaster brought by the pandemic, the tourism industry, particularly hotels need resilience to rise above it. A tourist destination’s capacity to thrive amidst adversity proves its sustainability. In their Study, Bao & Quynh (2021) indicates that “tourism association should strategize on constructing tourism resilience methods such as raising the standard of tourism goods and tourism personnel resources, developing marketing plans, and digital transformation to overcome challenges during this period.” The government plays a vital role in creating plans, strategies, guidelines, and resources to bounce back from the economic crisis brought on by Covid-19. Moreover, “the ability of a system to absorb, adapt, and transform in the face of dangers, shocks, and pressures is referred to as resilience” (Zakour & Swager (2018). In relation to the above discussion, this study was designed to determine the social and economic adaptive capacities of the selected hotels in Iloilo City as the basis for a recovery plan.

Research Objectives:

This study aims to determine the following:

1. Characteristics of the Hotel Establishment ) period of operation; b) annual income from tourism activities before the pandemic; c) annual income after the pandemic d) the number of people employed; and d) status of involvement in government programs;
2. hotel establishments’ level of Adaptive capacities in terms of social and economic capacities;
3. If there are significant differences in the adaptability of hotel establishments in terms of social and economic adaptive capacities; and
4. develop a proposed recovery plan that can be recommended based on the results and findings of this

Paradigm of the Study

Figure 1. The Conceptual Design Depicting the Relationship Between Variables.

LITERATURE REVIEW

Prior to the pandemic, tourism was a significant factor in the continued economic expansion of the Philippines. According to Caynila, et al. (2022), travel receipts reached US$9.3 billion in 2019, up by 20.8 percent from the tourist receipts of US$7.7 billion in 2018. In March 2020, the World Health Organization declared a global health emergency after alarming levels of the spread of the Covid-19 virus. Because of the global pandemic, the United Nations World Tourism Organization (UNWTO) has declared 2020 to be the worst year in the tourism industry. According to the World Travel & Tourism Council (WTTC) Report (2021), the total travel & tourism GDP loss was $4.5 trillion with 62 million job losses in 2020. One of the biggest global shocks to the travel and tourism industry since the World Wars of the 20th century is the Covid-19 pandemic. There were travel restrictions, and most of the establishments were closed down, including tourism-related establishments. People were ordered to stay at home, daily activities of the local communities were disrupted, and the well-being of every individual became crucial. Many were already facing dilemmas and uncertainty regarding their future operation. Like tsunamis, flash floods, landslides, and earthquakes, the Covid-19 pandemic is just one of those disasters encountered by the tourism industry, but the difference is that the pandemic has a life-long effect. In the study of Zakour & Swager (2018) resilience is defined as the ability of a system to absorb, adapt, and transform in the face of hazards, shocks, and stresses. The balance of environmental liabilities and capabilities determines both disaster susceptibility and resilience. Irawan et al. (2021) mentioned that the functionality of an infrastructure system after a disaster and also by the time it takes for a system to return to pre-disaster levels of performance can measure resilience. In tourism applications, resilience has four factors: social, institutional (governance), economic, and ecological. Garces (2018) in Pocinho, et al. (2022), tourism has three bases and important actors: tourists, destinations/locals, and stakeholders/workers. A balance between these is crucial to ensure the continuous improvement of the industry because one cannot exist without the other. After the rollout of vaccines, destinations gradually reopened. Along with this is the shift in the travel trends of tourists. They prefer nature with a minimal presence of tourists and good sanitary conditions. The study of Pocinho (2022) found out that since employees are both the front and the backdrop of the tourism industry, firms should spend more in their well-being. A worker who feels comfortable and secure would provide better service, which will increase the happiness of the tourists. It is evident in the study of Gabriel- Campos, et al. (2021) that the community maintains a tight social structure, has a strong cultural identity based on its traditions and practices, and has a sense of humor that allows them to recognize the humor in hardship. This is essential for building community resilience and providing the community with the strength to thrive in the negative socioeconomic effects of the Covid-19 pandemic.

As captured by Okafor, et al. (2022) in their study, high resilient countries are likely to introduce larger interest rate cuts relative to low economies, while the low resilient economies tend to introduce greater fiscal stimulus. The healthcare system of high-resilience nations are also frequently more advanced. This could facilitate more effective responses from high-resilience nations to health catastrophes like the Covid 19 disaster. The Organisation for Economic Cooperation (OECD) pointed out that diversifying the tourism industry, boosting its resiliency shocks, addressing structural flaws that existed for a while, and fostering digital low carbon changes are all urgently needed to move forward toward more robust, equitable, and sustainable models for tourism development. In the study of Rioga & Manalo (2022), there were managerial implications on the ways on how their demographic profile affect their skills in handling niche ecotourism destinations, especially about their managerial skills and capabilities.

According to Manalo & Pagayon (2022), demographic profile of the respondents was a factor that significantly influenced perception and used their study as the basis in crafting a strategic tourism development framework based on the study’s results. Development frameworks include training and enhancement design to create a program.

However, Gherghina (2022) found that by looking at the tourism sector in Croatia, even the most affected economic sectors can survive the crisis. The key finding is that the participation of private businesses and civil society leads to robustness and agility in addressing the crisis. Soliku, O. et al (2021) implied that over-reliance on tourism and tourism-related activities by communities around tourist locations can have serious consequences for the local economy and the people’s livelihood in times of crisis. As tourism is a significant engine of sustainable development, intercultural communication and mutual understanding will be the key to post-Covid-19 recovery.

Resilience and adaptation are sometimes considered to be interrelated. The ability to be resilient is defined as a combination of a) coping with stress and evolving; (b) adapting and evolving; and (c) transforming. Whereas, as tourism destinations gradually opened up to tourists, different adaptation strategies to improve social and ecological resilience were implemented, such as strict implementation of health protocols, reduction of operating hours, prioritizing local tourists, and restrictions on unannounced visits. According to Hanani (2021), destination managers are more than willing to follow the government’s regulation. On the other hand, more relaxed enforcement from the government causes reluctance for managers to implement stricter health protocols. As people cope with urgent issues, they will be less likely to go on vacation. This situation necessitates changing business paradigms. To increase the resilience of tourism, governance should be strengthened, and markets should be diversified (Asian Development Bank (2021, p.16). To survive, the local people engage in different adaptation strategies. In Papua New Guinea, as mentioned by Dewi (2020), the pandemic forced the communities to use historical means of subsistence such as wild boar hunting, farming, selling yellow rice and wild boars at markets, and selling coffee and coffee beans. This strategy refers to the ability to adapt and transform a business to survive. In addition, the adaptation strategy in the physical sector of ecotourism was protecting the sustainable environment, especially the sea from illegal fishing, and clearing areas for preparation planting.

The analysis of the five dimensions of the Quebrada Verde community resilience reveals a high level of adaptation to the pandemic. This is achieved through appropriate organization and management skills of the community members and their inherent topophilia. The study of Gherghina (2022) finds out the community’s ability to combat the COVID-19 pandemic is strengthened by a variety of tangible and intangible adaptive abilities and capacities. Human activity on earth has a negative impact on the global ecosystem. The Covid-19 pandemic outbreak is a severe warning to humanity. As claimed by Muranyi & Varga (2021), the ability of a community to manage the effects of hazards depends on significant adaptation planning efforts and financial resources, both of which can be useful entry points for businesses and investors to work together to develop adaptive capacity. Investors cannot prosper unless the areas in which they invest flourish, and every asset class has a special connection to the area that may be used to support resilient economies and communities.

After the Covid-19 pandemic, businesses began to make up for their lost revenue during the protracted period of lockdown and impeded movement. The change in tourist trends gives ecotourism destinations great promise. The government provides financial aid to the community to ease the economic shock. The Philippines restarted its tourism activities in the new normal. The ADB reported that the Philippine tourism department had launched a digital tourism campaign. The ad “Wake Up in the Philippines” was created to entice tourists once traveling becomes possible again. It features the culture and people of 16 regions, a shift from its previous promotional campaign that shows off more on beaches and landscapes. With this shift, it manifests that the stress brought by the Covid-19 pandemic made the tourism agency shift its promotional structure for the tourism industry to rise again.

METHODOLOGY

The descriptive survey method of research was used in this study. This study was conducted in four lone districts sites in Iloilo City where selected DOT-accredited hotels are located. This study involved sixteen (16) hotel managers, and twenty-four (24) supervisors and administrative staff. They were male or female and were part of the industry for at least five years for them to be able to experience the struggles and challenges in their respective organizations. The respondents of this study were the officers and members of the community whose functions are on the management and operations of the selected hotels. The type of purposive sampling used in the study was the total population technique because the size of the population that has a particular set of characteristics is very small.

Instrumentation

The data for the study were gathered using the researcher-made questionnaire. The questionnaires were made of three parts. I) Characteristics of the hotels II) social and economic adaptive capacities questionnaire.

The response was interpreted using the following scale:

The scale was content validated by a juror composed of four members. Their suggestions and recommendations were observed in the revision of the instrument. After the scale was validated, the scale was pilot tested in three communities to determine its factor analysis, and construct validation, and was tested using the Statistical Package for Social Science (SPSS) software. Items with factor loadings of .50 and above were included in the instrument while those below .50 were discarded.

Data Analyses

The data for the study were quantitative research. The data were subjected to SPSS for processing and interpreting results. Frequency count was used to determine the number of participants belonging to a class or category of the independent variables. This was used to measure the level of adaptive capacities. Standard Deviation. This was used to determine the homogeneity and heterogeneity of the level of adaptive capacities. For inferential data analyses, the following will be used: Mann Whitney-U or Wilcoxon rank-sum test will determine the difference between two independent groups and dependent variables and used in the study and Kruskall – Wallis.

Kruskall-Wallis was used to determine whether or not there is a statistical difference among the variables.

RESULTS AND DISCUSSION

Descriptive Analyses on Hotel Characteristics

As described in Table 1, the frequency distribution of the data according to the hotel characteristics such as period of operation, number of people employed, and status of employment were gathered. As to the period of operation, most of the hotels that were assessed existed or were under operation in ten (10) years and above (f=27; 67.5%), while the other sites existed six (6) to ten (10) years (f=13;32.5%). When grouped as to the number of people employed, predominantly, hotels that were assessed have thirty-one (31) to forty (40) members employed (f=32;80%). and the least was ten (10) to twenty (20) (f=8;20%). As to the status of involvement in the government programs, among hotels that were assessed, eighteen (18) have increased their involvement (f=18;45%); fourteen (14) have decreased (f=14;35%); and eight (8) sustained (f=8;20%).

Table 1. Hotel Characteristics

Level of Social and Economic Adaptive Capacities as a Whole

As shown in table 2, the mean score of the data according to the level of adaptive social and economic adaptive capacities as a whole were gathered. As to the adaptive social capacity, the mean is very high (m=4.32; sd=.506), while both the adaptive economic capacity (m=3.58; sd=.506). These results build on existing evidence that adaptive capacity is characterized as the ability of people, communities, organizations, nations, and other entities to adjust to the current and probable future effects of changes in the global climate (Williams et al., 2015). The respondents created the necessary mechanisms to be able to adjust to the effects of the Covid-19 outbreak and the subsequent natural catastrophes that affected their operations. The community has a very strong social structure and retains positivity that allows them to recognize success despite their hardship. Managers’ and supervisors mean of subsistence to guarantee their security. The local government unit even offers financial aid for households to diversify and sustain their sources of income. Local leaders have a commitment to address environmental issues and members have a shared ability to manage resources.

Table 2. Level of Adaptive Social and Economic Adaptive Capacities as a Whole

Scale: 5.00 – 4.21 Very High; 4.20 – 3.41 High; 3.40 – 2.61 Moderate; 2.60 – 1.81 Low; 1.80 – 1.00 Very Low

Level of Adaptive Social and Economic Adaptive Capacities as to Period of Operation

As shown in Table 3, when grouped as to six (6) to ten (10) years in operation, the adaptive social capacity is very high (m=4.30; sd=.362), while the adaptive economic capacity is high (m=3.56; sd=.363). Meanwhile, when grouped as to having an operation of ten (10) years and above, the social adaptive capacity is very high (m=4.34; sd=.569), the economic adaptive capacity is high (m=3.59; sd=.599). Hotel organization offers possibilities for the diversification and maintenance of operations. Despite the shocks and stresses encountered by the hotel firms and adapt to the challenges.

Table 3. Level of Adaptive Social and Economic as to Period of Operation

Scale: 5.00 – 4.21 Very High; 4.20 – 3.41 High; 3.40 – 2.61 Moderate; 2.60 – 1.81 Low; 1.80 – 1.00 Very Low

Level of Adaptive Social and Economic Adaptive Capacities as to Number of People Employed

As described in Table 4, the level of adaptive social and economic adaptive capacities as to the number of people employed was gathered. When grouped according to ten (10) to twenty (20) members, the adaptive social capacity is very high (m=4.35; sd=.461), while the adaptive economic capacity is high (m=3.78; sd=.479). As to the hotels with thirty-one (31) to forty (40) members, the adaptive social capacity is high (m=4.32; sd=.524), the adaptive economic capacity is high (m=3.53; sd=.537). The social adaptive capacity of hotels with only 10 to 20 members is very high compared with 31 to 40 members which is only high. The factors that may affect an organization’s capacity to adapt are the degree to which individuals, groups, and communities were given the right to be heard in the decision-making process, and how institutions empower or disempower people. The smaller the number in an organization or community, the more the members build their trust in one another.

Table 4. Level of Adaptive Social and Economic Adaptive Capacities as to Number of People Employed

Scale: 5.00 – 4.21 Very High; 4.20 – 3.41 High; 3.40 – 2.61 Moderate; 2.60 – 1.81 Low; 1.80 – 1.00 Very Low

Level of Adaptive Social and Economic Adaptive Capacities as to Status of Involvement in Government Programs

As shown in Table 5, the mean score for the hotels in level of adaptive social and economic adaptive capacities as to the status of involvement in government programs was collected. As to the status of increased involvement in government programs, the adaptive social capacity is very high (m=4.34; sd=.638); while economic were high (m=3.55; sd=.639). When grouped as to the status of decreased involvement in the government programs, the social adaptive capacities are very high (m=4.30; sd=.348) while adaptive economic capacities were high (m=3.51; sd=.392). As to the sustained status of involvement in the government programs, the adaptive social capacities were very high (m=4.34; sd=.461); the adaptive economic capacities were high (m=3.78; sd=.479).

The findings suggest that regardless of the organizations’ involvement with the government programs, their social and economic adaptive capacities were high. They situated in the same locale where they have greater social cohesion and are resilient to changes. These organizations have diverse economies. They were well trained to address challenges and facing stress and shocks, their high social capacity to resolve conflicts, negotiation, participation, and other mechanisms of collaboration came to surface that they were able to resolve problems, with or without the intervention of the government.

Table 5. Level of Adaptive Social and Economic Adaptive Capacities as to Status of Involvement in Government Programs

Scale: 5.00 – 4.21 Very High; 4.20 – 3.41 High; 3.40 – 2.61 Moderate; 2.60 – 1.81 Low; 1.80 – 1.00 Very Low

Inferential Analyses

Differences in the Level of Adaptive Social Capacities as to Period of Operation and Number of People Employed

Mann-Whitney U test results in Table 6 show no significant differences in the level of adaptive social capacities as to the period of operation [U=152.00; p=.495] and the number of people employed [U=126.50; p=.959]. The two-tailed probabilities of .495 and .959 are greater than the set significance level of .05 alpha. The result further implied that the organizations’ level of adaptive social capacities does not differ in terms of the period of operation and the number of people employed.

Table 6. Differences in the Level of Adaptive Social Capacities as to Period of Operation and Number of People Employed

Differences in the Level of Adaptive Social Capacities in Terms of Social Status of Involvement in Government Programs

Kruskal-Wallis test results in Table 7 showed no significant differences in the level of adaptive social capacities regarding involvement in government programs [H(2)= .696;p=.706]. The two-tailed probability of .706 is greater than the set significance level of .05 alpha. Results implied that organizations’ levels of adaptive social capacities do not vary regarding the status of involvement in government programs.

Table 7. Differences in the Level of Adaptive Social Capacities in Terms of Social as to Status of Involvement in Government Programs

Differences in the Level of Adaptive Economic Capacities as to Period of Operation and Number of People Employed

Mann-Whitney U results as reflected in Table 8 showed no significant differences in level of adaptive economic capacities as to the period of operation [U=162.50; p=.707] and the number of people employed [U=98.000; p=.309]. The two-tailed probabilities of .707 and .309 are greater than the set significance level of .05 alpha. The result further implied that the organizations’ level of adaptive economic capacities does not differ in terms of the period of operation and the number of people employed.

Table 8. Differences in the Level of Adaptive Economic Capacities as to Period of Operation and Number of People Employed

Differences in the Level of Adaptive Economic Capacities as to Status of Involvement in Government Programs

Kruskal-Wallis test results in Table 9 showed no significant differences in the level of adaptive economic capacities regarding involvement in government programs [H(2)= 1.255;p=.534]. The two-tailed probability of .534 is greater than the set significance level of .05 alpha. Results implied that levels of adaptive economic capacities do not vary regarding the status of involvement in government programs.

Table 9. Differences in the Level of Adaptive Economic Capacities as to Status of Involvement in Government Programs

CONCLUSIONS

Based on the results, hotel characteristics were generally described as most of hotels operated longer than ten (10) years and above; the majority have thirty-one (31) to forty (40) employed members; and there is a higher number of hotels that have increased their government involvement.

The hotels generally have Very High level of adaptive capacities when taken as an entire group. Predominantly, the level of social adaptive capacities was noted as Very High. The economic adaptive capacities was noted as High. When categorized as to the Period of Operation, the dominant or highest level of adaptive capacity was Social. When classified as to the Number of People Employed the dominant or highest level of adaptive was Social. The status of the Involvement in Government Programs was commendable. Most of the hotels that were assessed have an Increased Status of Involvement. The organizations’ trust and respect for their managers play a significant role in coping with the challenges. They have the desire to be heard and to be included in every decision-making. The organization as a united group should not look up to money as their motivating factor. They believe that being godly, patriotic, and environmentally oriented can build their resilience. the organization believe that trust and respect towards their managers play a significant role in coping with the difficulties they encounter. They always have the desire to be heard and included in decision-making. As a group, the organization believes that money is not their motivation why they stay employed despite the inefficient income they earn from the business. They always have the aspiration to work together harmoniously and to reach one goal. the organization believe that trust and respect towards their leader play a significant role in coping with the difficulties they encounter. They always have the desire to be heard and included in decision-making. Financial assistance and dole-outs were distributed by the local government unit during the pandemic. In the gradual reopening of tourism in the New Normal, additional businesses, new activities, and additional capital are needed. The organization fears political inertia, particularly in the marketing and promotional campaigns of the hotels.

There were significant differences in the organizations’ level of adaptive social capacities as to the period of operation and the number of people employed. There are no significant differences in the level of adaptive social capacities regarding involvement in government programs. There were no significant differences in the level of adaptive economic capacities as to the period of operation and the number of people employed. There were no significant differences in the level of adaptive economic capacities regarding involvement in government programs. The very high social adaptive capacity of the organization shall be the standpoint of the hotel managers as people tend to support adaptation strategies if they feel included and heard.

Based on the findings, the proposed recovery plan was formulated. The Plan was to provide strategies to rebuild the hotel industry after the shocks and stresses brought by the Covid-19 pandemic. The strategic recommendations include:

Creation of a ‘civic infrastructure’ to improve social relationships among community members. 100% participation of the members in the decision-making, and an increase of transparency rate are expected;

Preservation of existing businesses and creation of new ones to generate income and promote employment among the local people. In collaboration with various local agencies, it is expected that 100% of the members will be upskilled and to open more economic opportunities; and

Rebuilding of the depreciated structures incorporated with green design to increase the number of environmentally sustainable landscapes. Awareness on environmental protection shall also be intensified through standardized scripts for tour guides, integrating environmental care and concerns.

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