Journal of Business and entrepreneurial

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Organizational structure of new ventures in the

tourism sector by COVID- 19

Estructura organizacional de los nuevos emprendimientos

en el sector turístico por el COVID- 19

Carlos Patricio Orellana Orellana

Joffre Ricardo Campoverde Saldaña

Dayanna Rafaela Carvallo Muñiz

Mischel Steffanie Steffanie Leon Narvaez

ABSTRACT

Tourism for a country is a sector that generates income

and helps to improve the quality of life; in addition, it has

become the driving force for rural communities full of

history, in which various activities are carried out based on

their customs, providing tourists not only distraction, but

also knowledge and empathy. Tourism helps countries to

get out of poverty; it has the potential to boost economic

growth; although much of its work belongs to the informal

economy, communities that come together to strengthen

in one way or another their family economy, seek through

tourism the generation of resources, many of them coming

to form as recognized organizations. Hence, this work

seeks to identify the organizational structure of new

ventures in the tourism sector in the crisis represented by

COVID-19, in order to learn about new innovative forms

of entrepreneurship and describe the economic effects on

Business Engineer, Universidad Católica de Cuenca extensión La

Troncal, La Troncal, Ecuador, corellanao@ucacue.edu.ec

https://orcid.org/0000-0002-0958-7253

*Economist, Universidad Católica de Cuenca, La Troncal extension.

jrcampoverdes@ucacue.edu.ec, La Troncal, Ecuador

https://orcid.org/0000-0003-3071-1738

* Administration student, Universidad Católica de Cuenca extension La

Troncal, La Troncal, Ecuador dayanna.carvallo@est.ucacue.edu.ec

https://orcid.org/0000-0002-1042-5737

*Student of administration, Universidad Católica de Cuenca extensión

La Troncal, La Troncal, Ecuador, mischel.leon@est.ucacue.edu.ec

https://orcid.org/0000-0002-7525-7033

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the sector under study; this research will seek its results

using a qualitative and descriptive methodology based on

the observation of information from the tourism sector

that has been affected by the health crisis of COVID-19.

Keywords: Entrepreneurship, Organizational Structure,

Covid-19, Tourism, Innovation.

INTRODUCTION

Currently, tourism has been one of the sectors most affected by the covid-19 health

crisis since it has affected a vast chain of values in the hotel and tourism sector; the

coronavirus has caused an impact on the tourism sector at an economic level, producing

the need to promote and implement health measures that allow these sectors that were

harmed by the pandemic to recover. During the first months of 2021 the arrival of

international tourists has been reduced, generating millionaire decreases to the income

of the tourism sector, as in 2020, according to data provided by the World Tourism

Organization (UNWTO).

Most of the people working in the tourism sector are working within the informal

economy or micro, small and medium enterprises; the business entities of the mentioned

sector employ a large number of women and young people, within rural communities,

indigenous peoples and many other places full of history; tourism has had a great

relevance since it has been the driving force to generate income for rural communities,

full of attractive places and history; In the last two years, according to statistical data and

projections of the "Model of International Tourism Demand" (MDTI) unemployment has

been growing, a potential of 6 million direct tourism jobs have been lost in 2020 and is

expected to increase by one million more by 2021, and 9 million indirect and induced

jobs with equal growth for this year, caused by the loss of 68 million tourists and with

growth to 73 million by the end of 2021 in all of Latin America and the Caribbean.

While the crisis situation due to the coronavirus contagion increases, the decline in the

economy of tourist destinations decreases, generating severe economic impacts every

day; according to studies conducted by Adventure Travel Trade Association, which

indicates that a crisis of this type develops in three different phases in which

organizations must act with strategies that contribute to move forward from a fall in

their financial indicators. In the first phase, tourism is in the waiting room, as countries

prioritize health and productive sectors that cover basic needs; then the second phase

is when tourism organizations must prepare for the safe operational return, as the

number of infected people begins to decrease and governments give the green light to

tourism activities; and finally in the third phase, a new way of life will have been adapted

in the minds of people, and it is where innovation will mark a differentiating point for

organizations or companies dedicated to this tourism sector.

Now, a key question in this regard is formulated in each of these phases: What

organizational structure should these innovations or ventures in the tourism sector

maintain in this time of crisis? What is sought with this question is: to analyze the

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organizational structure of new ventures; to identify the new innovative forms of the

tourism sector; and, to know the economic effects that the pandemic left to this sector.

The following work evaluates the results of the health crisis that affected tourism in Latin

America and the rest of the world in its economy, giving priority to these sectors that,

with strategies that will be seen below can improve economic growth. Likewise, with

the statistics and data it will be possible to analyze and elaborate specific actions that

will be of benefit to achieve a better performance of the trade of the aforementioned

sector, as well as the outstanding management of tourism in the country. On the other

hand, the research seeks to reflect the importance of the tourism sector. The

contribution of the following work will be very useful for the population who have

interest, concern or at the same time are related to the tourism trade, providing them

with knowledge about the influence of the coronavirus.

Tourism, made up of companies, tourist destinations and government agencies in this

sector, must confront this health crisis with tourism diagnostic studies, which should

contribute to strategies that contribute to decision-making by the country's tourism

stakeholders, as indicated in their publications.(Viniegra, 2016, p. 269)

The disruption of the tourist activity started with the air transport companies, it was

expanding in a few days to the complete tourist services: accommodation, catering. For

Zúñiga (2014) In the current situation it is not possible to speak only of a contraction of

tourist demand, both domestic and international. Travel to tourist sites has come to a

complete halt, thus slowing down the entire socio-economic dynamic associated with

them, such as the movement of tourists, hikers and visitors around the planet, which

forces the search for new opportunities for regeneration and, therefore, represents a

great challenge for the sector.

Epidemics, pandemics and other crises, be they health crises, climatic catastrophes or

terrorist attacks, all of which have negative social, political and economic consequences

in the different regions, sectors or countries of this planet. The World Health

Organization (WHO) has demonstrated with data the main effects caused by the

different crises that have attacked the world, chronologically.

• SARS: Severe Acute Respiratory Syndrome, 2003, Asia, Europe, North and South

America, 7740 deaths and 40 million dollars in losses.

• H1N1: Swine Flu, 2009, pandemic, 18641 deaths and 50 million dollars in losses.

• EVD: Ebola, 2013, Africa, Italy, North America and United Kingdom, more than

11,000 dead and $53 million in losses.

• COVID-19, 2019, pandemic, 3-May-20, more than 244,000 dead and $280 billion in

losses.

Since tourism is an important sector worldwide, comparative studies have been carried

out among countries such as Italy, France, China and Spain. Sandoval et al. (2020) In the

research of Sandoval et al., alternatives are included to reactivate tourism in these four

countries, which are the ones with the highest tourist income worldwide, due to their

main destinations.

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• France. For the tourist reopening of this country the tourist must have medical

certificates of entry and exit, comply with the following conditions at the entrance:

o Be a resident in France, or be in transit;

o Doctors, nurses or have a health profession;

o To be in the line of freight, passenger and cargo transportation;

o Being part of a diplomatic mission, or border official.

• Italy. The reopening of some of its tourist areas in theaters, cinemas, concerts, and

other spaces with indoor and outdoor events. The shows will be developed with

pre-assigned seats complying with the minimum distance of one meter, both for

administrative staff and spectators, complying with the maximum capacity of 1,000

people for outdoor meetings and 200 people for indoor venues. Some cities in this

country offer promotions that help to encourage tourism, together with the

reopening of international flights, with sanitary measures and respect for the

distance.

• China. It is the first country to open its tourist destinations, due to its controls

against Covid-19. However, travel within China is complicated by the different

movement restrictions for those who want to enter the country's capital.

• Spain. It partially reopened public places, while the Government authorized

international travelers not to keep quarantine when entering the country, in the

hope of attracting foreign tourism. Thus, the Minister of Foreign Affairs stated that

"there may be restrictions to mobility as a result of emergency measures to control

outbreaks of contagion".

COVID19 -is the most recent pandemic to occur on the planet. "Both this new virus and

the disease it causes were unknown before the outbreak broke out in Wuhan, China in

December 2019. COVID19 is now -a pandemic affecting many countries around the world."

The COVID-19 (coronavirus) pandemic is not just a pandemic affecting people's health,

it is more of a catastrophe problem affecting society and the economy. "Regarding the

economic impact, the World Tourism Organization, as of March 27, 2020, estimated a 20-

30% reduction in international tourist arrivals that will cause a loss of 300-450 billion US dollars"

(Berselli, 2018, p. 610)

Organizational structure is "the formal distribution of jobs within an organization, a process

that involves decisions about job specialization, departmentalization, chain of command, span

of control, centralization and formalization."(Díaz-Andreu, 2014, p. 26). Companies define

their organization according to their size, command modality, business activities, work

areas, number of workers, among others. Hence, companies maintain their

organizational structure "according to all the activities or tasks they intend to perform, through

a correct structure that allows them to establish their functions and departments in order to

produce their services or products, through order and adequate control to achieve their goals

and objectives". Acosta (2014) It establishes that the theory exposed by Mintzberg (1991)

in his book "Design of Efficient Organizations" who complemented Fayol's theory and

structured the organization in five phases; as follows: the figure maintains as a base the

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"operative nucleus" who in a company are represented by the operators or workers,

these in turn maintain a union with the "Strategic Summit" which is located at the top of

the diagram, and that for the administrative practice are the top managers of a business,

their communication with the bases are made through the "middle line" known as the

heads of area or departments; At their sides the figure supports the presence of the

"technostructure" and the "Support Staff" who are known as the specialized team and

work analysts that complement or strengthen the organization.

For Díaz-Andreu (2014)tourism took shape over time, being "... a privilege of the wealthy

who were small groups of great economic power, many of whom traveled for pleasure and out

of a desire to stand out as an important person". Nowadays, tourism becomes "... a necessity

and in a pleasure accessible to large masses entitled to participate in recreation and rest."

(Marulanda & Morales, 2017, p.54)

Governments consider the tourism sector as one of the resources that generate income

and increase the Gross Domestic Product (GDP). Experts in this area agree that tourism

is supporting the economies of a country, increase employment, and improve the

lifestyle of sectors, even if they are vulnerable, but with history. "Tourism activity has the

potential to boost economic growth and investment at the local level, which in turn becomes

employment opportunities, income distribution and boosting other activities such as agriculture,

fishing and handicrafts in the receiving localities" (Villegas, 2019, p. 39)

Tourism and the pandemic have met in a very strong way, since the presence of the

virus has generated a reverse reaction against this sector; employment has decreased,

losses have been generated and in many cases tourism related businesses have been

closed. Those familiar with the problem indicate that the sector will have a very long

time span, it will almost take more than 10 years for a recovery in normal financial terms;

however, to (Zuluaga & Moncayo, 2014, p. 89)"... the sector can recover and attract

investments that will create many jobs, especially for the most vulnerable groups, such as women

and young people in 72 months".

The drop in tourism has caused, in addition to unemployment and business losses, a

decrease in the tax burden for this sector, a lower number of foreign tourists and thus

a decrease in the circulation in the consumption chain in the interior of a country, among

other things. (Castañeda, 2014, p. 37) The private sector has released studies that measure

the impact of the disease on the sector, as well as proposals for the reactivation and opening

of hotels and sites of interest".

The economic and social relations that the pandemic has left in this study sector have

been considered by experts in their studies as radical alterations and its consequences

would last about 5 to 10 years. Therefore, this crisis, according to (Bernal, 2013, p.

489)"... has been forcing companies to adapt their internal functioning to the measures of social

distancing and with them the support of information and communication technologies, to which

all organizations will have to adapt".

In Ecuador, according to studies conducted by the Universidad Técnica Particular de

Loja (2020) "... 90% of the tourism industry is made up of MSMEs, 80% of which are affected

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by the pandemic in the labor, productive and economic spheres. The most affected sectors are

tourism operation services, tour guides, restaurants, lodging, and events".

The economic outlook with respect to international tourism shows a 22% drop with an

equivalent of 80 billion dollars in revenues; and a further decline is projected that could

reach a 78% drop in revenues, making 2020 the year with the worst economic data since

1950. The elimination of between 100 and 120 million jobs in the sector is also expected.

MATERIALS AND METHODS

The methodological design of this research is qualitative, since it will investigate the

organizational structure of new ventures in the tourism sector during the COVID-19

crisis, analyzing innovative forms of economic revival in the tourism sector in the face of

the health crisis. We will apply techniques and tools based on the collection and

observation of information from bibliographical references.

Obtaining direct and reliable information, as long as an adequate and controlled

procedure is carried out when observing tourism in these times of COVID-19, as in its

organizational structure of the new enterprises in crisis of COVID-19 and its economic

effects, collecting information in bibliographic files, web pages, books, magazines and

scientific articles, in order to draw different conclusions.

Techniques based on bibliographic and descriptive observation cards will be used to

analyze the printed material. Information was sought in different web pages, related

news, works done by graduate students, different scientific articles. The research

elaborated in the theoretical framework of the study is used.

RESULTS

Entrepreneurs in times of crisis before Covid, create new companies, which in turn

implement new work businesses, boost competition and increase productivity by

promoting technological and service changes.

In many countries, tourism enterprises have shown a decrease in their income and

therefore in their profits, their operations have had to be reorganized, especially in

restaurants, where the on-site service in many of them reached zero income, many of

them reached the total closure of their production; other establishments, whose

structure is mostly family businesses endured a partial closure, and improved service

processes, by managing a production whose sales were made at home, or with exclusive

on-site diners.

The hotel industry was also affected by this health crisis; travelers, who were already

few in number, did so to visit tourist sites, but avoided staying overnight in cities or

places that were not their residence; This hotel segment has sought strategic alliances

to guarantee, through discounts, promotions and agreements, the permanence of

tourists in cities or places with the purpose of occupying their facilities, showing in them

a whole restructuring in the health area, with improvements in image, hygiene and very

useful prevention activities to increase the confidence of their clients and at the same

time guarantee the life of all the actors of this tourist sector.

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Demand in the sector under study has not improved, nor is an improvement expected;

rather, a contraction is expected for tourism services, as governments propose policies

or preventive actions even when the pandemic ends, this new lifestyle should be studied

by organizations involved in tourism, in order to manage adaptive strategies to the

change that has caused the crisis.

In addition to the above, this health situation has forced businesses to adjust their

operations to adapt to and use control measures, supported by technology and

communication, which should be applied in all organizations regardless of their size;

other organizational actions include inter-institutional cooperation with companies in

the same sector, complementary sectors, and the government, which act as specialized

agents and thus improve logistics, in order to generate strategies that lead to solving

financial and marketing problems.

Studying demand means not only assessing the impact on mobility restrictions for

people, but also analyzing the contraction in demand for tourism services due to this

economic and health impact, even after the pandemic.

Competitiveness in tourism must be taken into account by those companies dedicated

to this type of business. New ventures should focus on promoting the territory and its

attractions, seeking not only a healthy distraction, but also moments of relaxation,

contact with history and nature, and ensuring a place where health and safety for life

itself prevails.

Identify new innovative forms of entrepreneurship in the tourism sector by

COVID- 19

As a strategy to improve the current situation, we discuss the need to implement a wide

range of fiscal and monetary policies to develop plans to support disadvantaged sectors,

both small and medium-sized enterprises. They are designed to limit the negative impact

on the condition of households, businesses and financial institutions, and to support

economic recovery. In addition, the main reactivation strategies are the lowering of the

price of travel services, promotion on social networks and the company's migration

process towards management and marketing through a more efficient and innovative

online model.

Institutions such as the Inter-American Development Bank have pointed out that, in

order to advance in the recovery of the productive sectors and with it the tourism

sector, particularly entrepreneurship, additional innovative measures will be necessary.

The following recommendations are intended as a contribution to the aforementioned

sector, grouped in three main areas and summarized in the following points:

Agreements and Data

• Public-private cooperation to establish, communicate, implement and monitor the

health and safety agreements of the different production departments.

• Large-scale management of diagnostic tests and antibodies.

• Establish a system of risk certification of individuals

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Digital Media

• Provide credit, subsidies and co-financing for the adoption of technology

(software, applications and digital platforms, hardware, etc.).

• Co-funding of digital services (digital maturity measurement, expert advice,

strategy, digital skills training)

• Business support services providing quotations through digital platforms

• Review the update of the regulatory framework to support the remote office and

the digital transformation of SMEs (e-signatures, payment methods and e-

commerce).

• Support capacity building and network security infrastructure for small and

medium-sized enterprises.

Business Strengthening Activities

• Strengthening the strategic value chain and discount promotions for customers

• Opportunities to implement new sustainable businesses or, conversely, to

implement new business restructuring services on a global scale.

• Modernization of the productive sector in response to the needs of the health and

economic crisis.

To learn about the economic effects on the tourism sector by COVID- 19.

Trade relations and governance by the state have been affected by the pandemic.

Economic analysts point to contractions in the tourism sector, even though the

pandemic situation may pass, since these areas, in some countries, have been reducing

their dynamism due to political and social crises that were present before the health

problem.

The pandemic has caused global problems, especially at the health, social and economic

levels, the latter of which has affected the tourism sector. The effects that have stagnated

the economic activity of several countries, among other aspects, are: a) the interruption

or reduction of the supply chains of products, b) the decrease in the production of the

main economies, c) the deterioration in the prices of raw materials; this has been the

result of the confinement measures and restrictions established by governments to avoid

an increase in the contagion curves.

The World Tourism Organization (WTO) reports a 20% to 30% decrease in the number

of visitors to tourist sites. Thus, Ecuador would be affected with the entry of foreign

tourists from developed countries and with economic power, which translates into a

decrease in international visits of about 450 thousand people.

Companies in this sector seek government support in order to avoid a fall similar to the

one caused by the Ecuadorian crisis, such as the national holiday in 2002, and the political

crisis that occurred at the beginning of the 21st century; all these antecedents are cited

with the sole conviction that governments should help to ensure that liquidity problems

do not become financial problems of profitability and solvency. Governments should be

made aware of the importance of promoting tourism in the different geographical areas

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of their territory in order to generate resources that are important at the time of

seeking sustainability for the country.

Tourism in rural communities, through policies that support the popular and solidarity

economy, will allow more organizations to appear, and these in turn increase local

employment, which would strengthen the economy through community

entrepreneurship and rescue the customs, cultures and traditions, forming tourist

attractions in them. On the other hand, tourism is integral, encompassing history,

geography, nature, technology, among other resources; but at the same time, it depends

on innovative strategies to improve its offer and attractiveness; even more so when the

crisis has brought about a new normality that generates changes in people's habits.

The reactivation of tourism is an action that should seek to regenerate, revive and boost

business in this sector, especially if the country has natural and historical resources that

have been abandoned due to government decisions aimed at generating income through

other means of development, which are gradually being depleted.

It is still necessary to solve problems that the tourism sector will keep pending, while it

generates responses to the pandemic in the short term; these problems will have to be

addressed in parallel, as well as sequentially, with employees, customers and distribution

channels, seeking in each of the problems, conditions of response with liquidity and

financial equilibrium.

Administrative efficiency will not be sufficient with the strategies analyzed above, but it

will be prudent to maintain an administration in times of crisis based not only on its own

experience left by the pandemic, but also to emulate the success stories of other

organizations that have been able to excel in previous crises and today have been

strengthened.

Planning is the main tool to which organizations should give light to immediate action,

the design of a Strategic Plan that allows structuring the return of the business to a

normal state in an optimal and immediate way, this work should be done without

ignoring the risks and prioritize the lives of people at all times.

When talking about normality, one must ask: What is the new normality in the tourism

sector after Covid-19? What will be the tourist's behavior after the pandemic, so that

businesses can establish new processes, new products, and new services, thus ensuring

the success of the companies in Post-Covid?

Finally, to return to analyze the post-Covid organizational structure, with the issues of

health, there will be and fiscal policies generated by governments to protect life, new

processes will be created, in some cases new positions or areas of work, which will lead

organizations to restructure, in search of success.

CONCLUSIONS

The pandemic has had an impact on the tourism industry, so that the companies have

adopted preventive measures such as distancing and elementary sanitary actions, they

have implemented biosecurity protocols and with them the presence of technology and

communication, to which they adapt to this new organizational structure, regardless of

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the size of the business; also, these organizations receive support from the government

with economic resources, training and financial relief.

Tourism is the sector that has lagged the most in entering the normal activities of a

country, this has caused liquidity problems in most of these businesses, and in some of

them more severe financial problems; in spite of that, new ventures have been

reactivated. It was analyzed that entrepreneurs seek new innovative ways, creating new

businesses, which in turn generate employment, boost the sector and increase the

productivity of a region; this is how the creation of online ventures, have taken force in

social networks; thus covering the unsatisfied demand that grew due to the health

problem caused by Covid-19, this is one of the strategies that could be adapted to the

tourism sector, among other activities that help to boost the economy of these

organizations. For businesses whose activity is tourism, it was clear in their strategic

diagnoses that the pandemic generates a serious threat to the sector; affecting the

income of the company, its workers and the community that benefits from the presence

of these organizations. The businesses that close, the unemployment that increases, the

lack of government support to rural communities, the underutilization of natural

resources with historical presence, as well as technology and communication, all these

problems must be grounded in a strategic planning for this sector to have in mind the

advantages and disadvantages at the time of an organizational restructuring after the

pandemic.

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