In response to the COVID-19 outbreak, hotels have taken different strategic operational action to recover from the crisis. Hotels have cut expenditures, terminated employee contracts and, changed operational patterns to survive from this sheer devastation that the pandemic have caused the hospitality and tourism industry. This study investigates the importance of F&B operations on hotel productivity changes using the control function estimations, in response to COVID-19, applying the case of the Taiwanese hotel industry. Using regression discontinuity design analysis, first, the study finds significant causal impact of COVID-19 travel restrictions on hotel revenue, especially for the rooms department. Second, using the control function methods, findings show that F&B operation is a more efficient strategy to recover the hotel productivity and revenue from the pandemic. This research provides insights on how hotels can reallocate their operational resources in response to crises.
