COVID-19 stalls economic growth this year as it hits Tourism sector collapse
MANILA – The global COVID-19 pandemic hit hard on Asia – Pacific tourism sector as the number of Chinese tourists declined significantly at the early stages of the novel coronavirus.
In a study entitled “COVID-19 and employment in the tourism sector: Impact and response in Asia and the Pacific” which the International Labor Organization released today, about 96 percent of the world’s destinations now impose some form of travel restrictions as reported by the World Tourism Organization.
Against this backdrop, the study revealed “the higher the share of employment in tourism, the harsher the impact to workers and economics. Employment in the tourism sector range from 10 to 12 percent in some Pacific Islands countries while in Southeast Asia, Cambodia, Thailand and Vietnam are the countries with the highest share of employment in tourism from 6.7 to 9.0 percent while in South Asia, it was learned Nepal had 8.1 percent with Sri Lanka with 6.8 percent.
According to their data from 14 countries, ILO estimates jobs and livelihood affected at least 15.3 million workers, 6.4 million of them women and 8.9 million men in the tourism sector are at risk due to the pandemic. They include airlines’ service crew, hotels and travel agencies as well as transport companies across the region have been asked to take paid or unpaid leave, accept reduced wages, or worse, simply let go.
It was found out in the study that in many Asia and Pacific countries, more than three in four workers in the tourism sector are in informal sector jobs sans basic protection and social protection coverage. Workers who are still at work in hotels, airlines and other hospitality industries cannot work remotely therefore increasing the risks of COVID-19 infection.
For people who fall ill, informal workers are disadvantaged in access to health-care services and left with no income replacement should they get sick or whenever lockdowns are imposed.
According to the ILO study, governments in the region introduced stimulus packages and other polices to directly support the tourism industry.
In 2018, the Asia – Pacific region played host to 348 million tourists who spent US$442 billion in tourism receipts and 5 percent of total exports. Three countries in the region had significant shares of tourism in total exports (Fiji with 52%, the Maldives with 84% and Tonga with 47 %).
“As a result of the COVID-19 crisis, economic growth is expected to stall at zero in Asia in 2020 marking the worst growth performance in almost 60 years according to the IMF,” the study revealed. Largest contractions of economic growth will be manifested in countries most dependent on tourism.
The region’s air transport industry in the Asia-Pacific region took the blunt impact from COVID-19 with foreign visitors opting to cancel their scheduled trips and as countries shut down their borders. Quoting a study from IATA, passenger revenues for the airline industry in the region will be US$8 billion lower this year compared to 2019 and that “most airlines are left with less than three months liquidity to sustain them through this period of turmoil.” Unprecedented measures have been taken by airlines from sending their staff to paid or unpaid leave, enforcing salary cuts or laying off workers.
It will be recalled Cathay Pacific, made its staff to take up to three weeks of unpaid leave just to reduce costs. It was reported more than 25,000 workers or 75 per cent of its staff members complied.
In the Philippines, Philippine Air Lines, the country’s biggest airline, laid off 300 workers in management and administration as early as last February.
Meanwhile, in Malaysia, 4 percent of hotel industry workers had been laid off as of March 20, with more taking unpaid leave and a pay cut while in Bali, Indonesia, some 20,000 hotel bookings cancelled by mid-February.
With strict border controls and lockdowns coupled with fears from tourists to visit other places, ILO said help should be accorded hotels and other tourism industries to cushion the impact of lack of revenue, possibly helping them pay their employees wherever possible.
The ILO study revealed many migrant workers in the tourism sector fled, attempted to flee to home provinces or countries to wait out periods of lockdown “with the added stress of unemployment and income security.” Their capacity to sustain themselves in rural provinces will be low and will require whatever the government could extend in forms of social assistance.
In the Philippines, the Department of Foreign Affairs reported that repatriated seafarers from cruise ships and hospitality industries breached the 20,000 mark since COVID-19 pandemic began.
Mitigating the impact of COVID-19 is expected from various governments and this could be partially achieved through the observance of relevant labor standards and social protection systems. Many workers in the tourism sector but remain outside the formal sector brings the importance of ensuring the livelihoods of informal workers. Social dialogue has be given due course to ease the insecurity among the peoples and heightened social tension.
“Enterprise-level social dialogue is also crucial,” according to the ILO study. This should be complemented by the ease of access to loans, lowering loan rates, providing loan guarantees, and granting additional time to pay back existing loans.
A shift from usual tourism-oriented business to medical purposes may be imperative by providing rooms for persons on government-forced quarantine or offering the rooms to medical staff. In the Philippines, several hotels and motels have been converted to quarantine facilities for returning overseas workers.
Countries with insufficient funds to cope with the COVID-19 response would require regional and international solidarity. The Pacific Islands will benefit from funding from the World Bank and from donor funds from Australia and New Zealand within the Pacific Vuvale partnership.
Tourist-oriented establishments have taken the blunt from COVID-19 pandemic. (File Photos of hard Rock Cafe in Manila and high-end Banyan Tree in Yangshuo, Guangxi, China/Melo M. Acuna)