NEPAL OPEN UNIVERSITY

Lalitpur Nepal

MGGRM 691: Research Methods

Submitted By: Submitted To:

Mr.Yam Baral Dr Jeetendra Dangol

Roll No 78342032

13th Jan 2024

COVID-19 Pandemic and its Impact on Restaurants in Thamel,
Kathmandu

COVID-19 pandemic has had a profound impact on the restaurant industry worldwide,
including the Kathmandu and Thamel area. In this literature review, I will explore the
theoretical and empirical understandings of this impact and identify research gaps that justify
the selected variables.
Theory Review
The COVID-19 pandemic has wrought unprecedented challenges on various sectors of the
global economy, with the restaurant industry being particularly hard hit. This review delves
into the impact of the pandemic on restaurants in Thamel, Kathmandu, and explores the
economic, crisis management, and consumer behavior theories that elucidate the multifaceted
repercussions.
The economic theories surrounding the pandemic's effect on restaurants are deeply rooted in
principles of supply and demand. The performance of the government in managing
the crisis and de-escalating the cation of the pandemic seems challenging with
the increasing numbers of infections. Thus, the lockdown strategy to
eliminate the transmission seemed effective in the initial stage; however, it could not
be the permanent solution (Ulak, 2022). Therefore, the Government of Nepal should trace the
chain of
transmission to control the pandemic as it has already reached the third stage. Lockdowns,
restrictions, and fear of infection drastically reduced consumer demand, causing a sharp
decline in restaurant footfall. This downturn led to an oversupply of restaurant services,
creating a stark imbalance in the market. The theory of supply and demand aptly explains the
economic strain faced by Thamel's restaurants as they grappled with diminished customer
bases and increased operational costs. Nepalese leisure travelers are very willing to travel,
once the government of Nepal relaxes restrictions related to travel and mobility (Dahal,
2020).
Particularly those emphasizing adaptability and resilience, are essential in understanding how
restaurants in Thamel navigated the challenges posed by the pandemic. Successful
establishments displayed agility by pivoting to delivery and takeout services, implementing
stringent hygiene measures, and leveraging digital platforms. The ability to swiftly adjust
business models aligned with crisis management theories that stress the importance of
flexibility during turbulent times. The losses of regular income from jobs were highly common
among the respondents and their network based on the discussions (Ghimire, 2022). The involved
people are more hopeful towards the brighter future of tourism in Nepal.
As health and safety became paramount concerns, consumers gravitated towards restaurants
with transparent hygiene practices and robust safety measures. Understanding these
behavioral shifts allowed some establishments to tailor their offerings, capitalizing on the
emerging demand for contactless services and ensuring a seamless dining experience.
Furthermore, the pandemic's impact on Thamel's restaurants aligns with broader economic
concepts like Keynesian and Monetarist theories. Government interventions, such as stimulus
packages and financial support, played a crucial role in stimulating demand and preventing
widespread economic collapse. Impacts like impacts on the economy, income livelihood
strategies (Dhakal, 2021). Like unemployment, lack of routine, and busy schedule, people are
involved in various illegal activities and break the social norms and values of the society
Analyzing these theories provides insights into the efficacy of government measures in
stabilizing the restaurant industry during the crisis.
The COVID-19 pandemic has proven to be a formidable test for restaurants in Thamel,
Kathmandu. Economic theories, crisis management strategies, and consumer behavior
theories collectively contribute to a comprehensive understanding of the challenges faced by
these establishments. As the industry seeks recovery, the integration of these theories will be
instrumental in crafting resilient strategies for future uncertainties.

Empirical Evidences
The global restaurant industry reeled under the hammer blow of COVID-19, and Thamel,
Kathmandu, felt the tremors acutely. Across countries, studies paint a grim picture: footfalls
plummeted, revenue hemorrhaged, and lockdowns choked operations. The shared struggle
against the pandemic has revealed common coping mechanisms – a surge in digitalization,
contactless services, and a desperate scramble for survival.

However, a one-size-fits-all approach won't work for Thamel. Unlike many places, it thrives
on international tourism, a lifeline severed by travel restrictions. Studies suggest that tourist-
dependent regions like Thamel face steeper economic cliffs. Furthermore, local socio-
economic realities add another layer of complexity. Lower-income groups, which may be
more cautious about dining out, form a significant part of the local population. The
effectiveness of local support initiatives and the agility of Thamel's restaurants in embracing
digital platforms will be crucial in weathering the storm.

While global research offers valuable lessons – such as the importance of revenue
diversification and digital adaptation – it's imperative to view Thamel through a local lens.
Understanding the unique challenges posed by its tourist dependence, socio-economic
makeup, and specific support measures is key. Only then can we tailor recovery strategies
that truly help Thamel's restaurants rise from the ashes of the pandemic?

Research Gap
Despite the wealth of research on COVID-19's impact on the restaurant industry, there
remains a research gap in understanding the specific challenges faced by restaurants in
Kathmandu and Thamel. This gap justifies the need for additional research that focuses on
this region. The existing literature on the impact of the COVID-19 pandemic on restaurants in
Thamel, Kathmandu, indeed highlights several important research gaps. As mentioned, there
is a lack of studies that specifically explore the unique characteristics and dynamics of
Thamel in the context of the pandemic. This gap hinders a comprehensive understanding of
the situation and prevents the development of targeted strategies and policies.
One important aspect that warrants further attention is the role of tourism in Thamel's
restaurant industry. Thamel is a popular tourist destination, and many restaurants cater to
foreign tourists. During the pandemic, with international travel restricted, this sector has been
particularly hard hit. Future research should explore the extent of the impact on tourism-
dependent restaurants, their adaptations to the new circumstances, and the potential for
recovery once tourism resumes. Another research gap lies in understanding the differential
impact of the pandemic across different types of restaurants in Thamel. For instance,
independent restaurants may have faced different challenges compared to chain restaurants or
restaurants owned by large hotel groups. The reasons for these differences could range from
access to resources and capital to their respective adaptability to changing consumer
preferences during the pandemic.

The interplay between the pandemic and the local socio-economic factors deserves closer
examination. Thamel's dense population, narrow streets, and high density of restaurants make
social distancing difficult, compounding the challenges faced by the industry. It would be
insightful to explore how these factors have influenced the response of restaurants to the
pandemic and what strategies they have employed to adapt. To explore the impact on
individual restaurants, research should also consider the broader economic implications of the
pandemic on Thamel's restaurant industry. For instance, how have changes in consumer
behavior and spending patterns affected the local economy? To what extent have restaurants
been able to retain their employees during the pandemic, and what are the longer-term
economic consequences for them?

Bridging these research gaps through further exploration of Thamel's unique characteristics
and dynamics in the context of the pandemic will provide valuable insights for policymakers,
businesses, and other stakeholders. This knowledge will inform effective strategies for
recovery and resilience, ensuring a sustainable future for Thamel's restaurant industry.

Conceptual Framework:

To guide our research, we have developed a conceptual framework that integrates key
variables Economic Indicators (EI), Consumer Behavior (CB), Crisis Management Strategies
(CMS), Adaptation Level of Restaurants (ALR), Government Interventions (GI), and their
Interconnections (see Figure 1). This framework highlights the interplay between COVID-19-
related restrictions, restaurant adaptations, consumer behavior, and financial outcomes. We
believe that understanding these relationships will provide valuable insights into the
challenges faced by restaurants in Kathmandu and Thamel.

Explanation of Variables
In examining the impact of the COVID-19 pandemic on restaurants in Thamel, Kathmandu,
several key variables are crucial for a comprehensive analysis. Each variable sheds light on
different aspects of the challenges faced by the restaurant industry in the wake of the
pandemic.

 Economic Indicators (EI): This variable encompasses various economic metrics that
gauge the financial health of restaurants in Thamel. Key indicators may include revenue,
profit margins, and employment rates within the restaurant sector. A decline in economic
indicators would signify the financial strain experienced by restaurants during the
pandemic.
 Consumer Behavior (CB): Understanding how consumers in Thamel have adapted their
behavior in response to the pandemic is vital. Changes in dining preferences, frequency
of restaurant visits, and the willingness to engage in contactless services are essential
components of this variable. Consumer behavior directly influences the demand for
restaurant services.
 Crisis Management Strategies (CMS): Examining the strategies adopted by restaurants
in Thamel to navigate the crisis is critical. This variable includes measures such as
implementing safety protocols, adopting digital platforms, and diversifying services.
Analyzing crisis management strategies provides insights into the resilience and
adaptability of the restaurant industry in Thamel.
 Adaptation Level of Restaurants (ALR): This variable assesses the extent to which
restaurants in Thamel have adapted to the challenges posed by the pandemic. It includes
the adoption of technological solutions, changes in menu offerings, and alterations in
operational procedures to align with safety guidelines. The adaptation level reflects the
industry's capacity to evolve in response to external shocks.
 Government Interventions (GI): Government interventions play a pivotal role in
shaping the environment for businesses. This variable considers the policies, financial
support, and regulatory measures implemented by the local government to aid the
restaurant sector in Thamel. Government interventions can significantly influence the
industry's ability to withstand and recover from the economic impacts of the pandemic.

By examining these variables—Economic Indicators, Consumer Behavior, Crisis

Management Strategies, Adaptation Level of Restaurants, and Government Interventions—a
comprehensive understanding of the multifaceted impact of the COVID-19 pandemic on
restaurants in Thamel, Kathmandu, can be achieved. This nuanced analysis facilitates the
development of targeted strategies for recovery and resilience within the local restaurant
industry.

Interconnections:

The impact of the COVID-19 pandemic affects Economic Indicators, Consumer Behavior,
Crisis Management Strategies, and Government Interventions.

A. Central Component: COVID-19 Impact on Restaurants:

This is the core element representing the overarching impact of the pandemic on the
restaurant industry.

B. Primary Variables:

a) Economic Indicators (EI):

 Directly linked to COVID-19 impact, as it reflects the financial health of restaurants.

 Influences and is influenced by the Adaptation Level of Restaurants.

b) Consumer Behavior (CB):

 Directly influenced by the impact of COVID-19, reflecting changes in customer

preferences and habits.
 Influences and is influenced by Crisis Management Strategies.

c) Crisis Management Strategies (CMS):

 Directly influenced by the COVID-19 impact and Consumer Behavior changes.

 Directly influences the Adaptation Level of Restaurants.
 Can be influenced by Government Interventions.

d) Adaptation Level of Restaurants (ALR):

 Directly influenced by Economic Indicators, Consumer Behavior, and Crisis

Management Strategies.
 Represents the ability of restaurants to adapt to the challenges posed by the pandemic.

e) Government Interventions (GI):

 Directly influenced by the COVID-19 impact, especially in terms of regulatory measures

and support.
 Can influence Crisis Management Strategies and the overall Adaptation Level of
Restaurants.

C. External Factors:
  Local Socio-Economic Conditions (LSEC)
 Tourism Dependency (TD)
 Government Regulations and Policies(GRP)
 Technological Infrastructure（TI）
 Cultural and Social Norms（C&S)
 Global Economic Conditions (GEC)
 Public Perception and Trust（PPT）

GEC TI

TD
EI ALR
COVID-19 Impact on
Restaurants

C&S CB CMS GRP

LSEC
PPT
GI

Figure 1: Conceptual Framework for COVID-19's Impact on Restaurants in Kathmandu and

Thamel.

The selected variables are justified based on existing theory and empirical evidence. Firstly,
COVID-19 restrictions, such as capacity limits and dining bans, have been shown to
significantly impact restaurant operations and profitability. Secondly, restaurants have
responded to these restrictions by adapting their business models, such as offering takeout or
delivery services. Finally, consumer behavior during the pandemic has shifted towards
increased use of these alternative dining options, leading to changes in demand patterns.
In conclusion, this literature review has provided a comprehensive overview of COVID-19's
impact on the restaurant industry, with a focus on Kathmandu and Thamel. The theoretical
framework highlights the interconnections of key variables and justifies the selected variables
based on existing theory and empirical evidence. Future research should build upon this
framework to further explore the specific challenges faced by restaurants in this region during
the pandemic and identify potential solutions for sustainable recovery.

References
Dahal, R. (2020). COVID-19, Tourism, and Nepalese Leisure Travelers’. Journal of Tourism & Adventure, 19.
Dhakal, C. P. (2021). Impact of COVID-19 In Tourism Sectors: A Study of Sauraha Chitwan. European Journal of
Hospitality and Tourism Research, 7.
Ghimire, D. (2022, Decimber). Impact Of COVID-19 on the tourism Industry in Nepal. Center University of
Applied Science, 26.
Ulak, N. (2022). COVID-19 Pandemic and its Impact on Tourism. Journal of Tourism & Adventure, 19.