Research On Tourism Industry Risk Management During The COVID-19 Pandemic

With the development of the economy and the improvement of people’s living standards,the consumption structure of Chinese people has gradually changed from basic material consumption demand to culture and entertainment consumption demand.Tourism industry,as an important part of the service industry,has been included in one of the pillar industries of the development strategy in our country.However,the outbreak of COVID-19 in 2020 has a major impact on the economy.The tourism industry shut down and suffered heavy losses.Subsequently,tourism enterprises gradually resumed normal operations during the regular epidemic prevention and control.However,the good times did not last long.In the first half of 2022,the spread of the COVID-19 in Shanghai has a severe impact,causing most of the listed companies in the tourism industry to lose money.The COVID-19 pandemic has been affecting Chinese tourism industry for more than two years,and most tourism companies are facing difficulties in operating.Under the drastic change of external environment,how to deal with enterprise risk has become an urgent problem to be solved in the tourism industry.To solve above problems,this paper selects China CYTS Tours Holding Co.,Ltd.(hereinafter referred to as the "CYTS")as a case study object,which is one of comprehensive domestic tourism companies.CYTS’ business situation rebounded in2021 and its net profit turned from loss to profit,so it is meaningful to study its risk response measures.Firstly,this paper reviews relevant researches to summarize the risks faced by enterprises and the risk response measures under the COVID-19 pandemic,and puts forward the theoretical basis.Secondly,this paper identifies the operating and financial risks faced by CYTS under the COVID-19 pandemic and analyzes the response measures taken by the company.Finally,this paper evaluates the response effect through the analysis of financial data,identifies the existing problems and puts forward suggestions.After analysis,this paper finds that the operating risks faced by CYTS under the COVID-19 pandemic mainly come from the cut off of tourism supply chain,which can be divided into suppliers’ shutdown,enterprises’ difficulty in resuming work and changes and decreases in consumer demand.The financial risks are mainly investment risk,financing risk and cash flow risk,which can be divided into increasing investment uncertainty,increasing financing difficulty,increasing financial expense burden,plummeting income and continuous expense expenditure.Moreover,from the perspective of economic consequences,the overall risk level of the enterprise after the epidemic has increased and it is urgent to take risk response measures.Then,this paper analyzes the risk response measures of CYTS and find its guarantee mechanism.It holds that risk response measures of CYTS is based on the effective organizational structure system and the efficient digital intelligence system.It mainly through the emergency traffic mechanism,the place epidemic prevention transformation,talent retention mechanism,perfect after-sales service,business stability and progress measures to deal with operating risks.And,in the outbreak period,the company through expanding financing channels,shrinking investment expenditure and collecting receivables to ensure sufficient short-term cash flow;during the regular epidemic prevention and control,it maintains a stable financial position through issuing long-term bills and continuing cost contraction.In order to test the risk response effect of CYTS,this paper quantitatively and qualitatively analyzes the financial data of CYTS in recent five years,and concludes that its measures to deal with risks are effective.However,it still faces business management problems which are employee turnover,insufficient consumer demand prediction,scattered sales channels and few online products.And it still faces financial management issues which are heavy financial cost burden,delayed financial warning,low efficiency of investment return and low efficiency of receivables recovery.In addition,it also faces digital problems which are low R&D investment and data island.Based on the above conclusions,this paper puts forward the following suggestions: on the business management level,it can improve the compensation mechanism and adopt equity incentive policy,integrate sales channels and strengthen the data collection of consumer demand,and try to build an online tourism product system;on the financial management level,it can adopt the financing strategy of combining equity and debt instruments,improve and refine the financial warning system,focus on small project investment,and use discount and other means to recover accounts receivable;on the digital level,it can improve the consumer demand system from the perspectives of data analysis and data quantification,and construct the organizational structure through the construction of the central data management platform to facilitate operating management and financial management.Based on the above research,this paper draws conclusions and suggests that tourism enterprises should take measures such as improving epidemic prevention measures and after-sales services,improving product content based on consumer demand,stabilizing financial status by raising money and reducing expenditure,and transforming into digital intelligence to cope with risks.Finally,this paper puts forward the limitations.