Impact of COVID-19 on Operational Efficiency of Indian Hotel and Restaurant Sector

The Indian hotel and restaurant (H&R) industry is up against fierce competition from large hotels and the rapidly expanding online market, particularly in the aftermath of the epidemic. This research employs data envelopment analysis (DEA) to evaluate the impact of COVID-19 on relative efficiency of 265 H&R firms in India. The analysis reveals substantial operational and scale efficiency (SE) discrepancies, underlines exemplary enterprises that could serve as benchmarks for underperforming firms, and offers a discerning evaluation of operational and strategic management modifications. Moreover, underscored by slack analysis are significant inefficiencies in resource usage, which are aggravated by increasing competition from overseas hotel brands and online food delivery firms. The study recommends that H&Rs optimize workforce management, review staffing needs and apply takeout services to increase efficiency. The analysis of slack indicates considerable inefficiencies in capital allocation, asset management and operational cost regulation. The findings offer strategic insights for management strategies, emphasizing the need for scale optimization, workforce rationalization and technology integration. Furthermore, by implementing strategic interventions, the government can play a significant role in industry revival, efficiency enhancement and long-term sustainability in a highly competitive market. JEL Classification: B21, C61, D24