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

Abstract

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 membersof the selected three companies (Zara Tours, Asante Tours, andMonkey Adventures) under investigation in the finance andprocuring departments. The study used a sample of 67 respondentsdetermined by census techniques as the population was small,commanding the entire population to be a sample size. Bothquantitative and qualitative data were collected. Tool validity wasensured using content validity, the literature related to cash flowmanagement, and a discussion with the research supervisor.Reliability was tested using the Cronbach alpha coefficient, wherea value of 0.733 was obtained. Data were collected using astructured questionnaire and key informant interview guide.Descriptive statistics and inferential statistics were both used fordata analysis. The study found that changes in cash flows affectedcash 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-19pandemic such as reduced cash flows complicated cashmanagement in the operations. It is concluded that reduced cashflows during the pandemic were disrupted, resulting in cashmanagement difficulties. It is recommended that; tourismcompanies enhance their supply cost management strategies aswell as maintain healthy cash management.