Effects of Reduced Cash Flows on Cash Management for Tourism Companies During COVID-19 Pandemic in Kilimanjaro Region, Tanzania

The COVID-19 pandemic affected businesses and organizations in their daily operations. Tourism businesses were the most affected, especially in countries whose economies are dependent on the tourism sector. This study sought to assess the effects of reduced cash flows during the COVID-19 Pandemic on cash management as part of the working capital management practices of the tourism companies in the Kilimanjaro region of Tanzania. The study was informed by the Cash conversion cycle (CCC) theory. The population for the study was 67 staff members of the selected three companies (Zara Tours, Asante Tours, and Monkey Adventures) under investigation in the finance and procuring departments. The study used a sample of 67 respondents determined by census techniques as the population was small, commanding the entire population to be a sample size. Both quantitative and qualitative data were collected. Tool validity was ensured using content validity, the literature related to cash flow management, and a discussion with the research supervisor. Reliability was tested using the Cronbach alpha coefficient, where a value of 0.733 was obtained. Data were collected using a structured questionnaire and key informant interview guide. Descriptive statistics and inferential statistics were both used for data analysis. The study found that changes in cash flows affected cash management for the three tour companies in the study area, which were statistically significant at p values less than 0.05. Specifically, the findings show that the effects of the COVID-19 pandemic such as reduced cash flows complicated cash management in the operations. It is concluded that reduced cash flows during the pandemic were disrupted, resulting in cash management difficulties. It is recommended that, tourism companies enhance their supply cost management strategies as well as maintain healthy cash management.