Tourism industry suffers loss of US$ 2.2mn due to COVID-19

Tourism industry suffers loss of US$ 2.2mn due to COVID-19

Since the suspension of tourists entering the country following the detection of the first COVID-19 case in the country last week, the government had to forgo a revenue of US$ 2.2mn.

Expectedly, the most impacted in the service sectors are the hoteliers, restaurants, guides, drivers, travel agents, aviation and other service providers.

During the press conference on COVID-19 on Thursday, Prime Minister Dr Lotay Tshering said that with the World Health Organization (WHO) declaring COVID-19 as pandemic, reopening the country to tourists is not likely soon.

Lyonchhen said that COVID-19 being pandemic does not mean Bhutan needs to change the response or management effort it is taking. “There’s no need to panic as we have already identified measures and are implementing them,” Lyonchhen said.

Lyonchhen also said that due to COVID-19 outbreak in the country and banning tourists in the country, more than 1,000 hotels in the country and more than 50,000 employees in the service sectors will be affected.

Lyonchhen added that ultimately, more than 150,000 people in the country will be affected by the end of March this year.

“While it is important to restrict the tourists coming into the country, many would incur losses in income due to drop of business,” Lyonchhen said.

Lyonchhen said that the pandemic may impact small economies, but preventing the spread of the disease is more important.

Lyonchhen mentioned that a taskforce team is working on economic response package in the wake of COVID-19 outbreak with five teams from various sectors. “Four economists are working in my office and the Members of Parliament are also working on effective response measures through a committee,” Lyonchhen said.

As of Friday, there are 139 tourists in the country in 10 Dzongkhags. By March 23, all the tourists will be leaving the country.

Lyonchhen said that since entry and exit from India, Nepal and Bangkok have been restricted, the government will facilitate them to exit them in coordination with the embassies.

Lyonchhen also said that government is keeping track of tourists who are in the country.

Currently, most of the hotels and restaurants in the country are closed for two weeks. Most of the employees were sent for leave for two weeks.

The Chairman of the Hotels and Restaurant Association of Bhutan (HRAB), Sonam Wangchuk said that if the restriction of tourists is beyond two weeks, tourism sectors will be the worst affected.

“For the two weeks restriction, we can manage the losses that we incurred. However, if it goes beyond two weeks the government should come up with interventions,” he said.

He said that since they incurred huge losses, they are requesting the government if they could defer the monthly installment of payment to banks and also if the government could look into fiscal measures like lowering the interest rates of the loan.

Currently, the biggest fear for the service sector is that they may not be able to repay the loans and salary for their employees if the situation worsens in the future.

For the two weeks around 11,000 rooms are cancelled, which means around 790 rooms are being cancelled per night every day.

The Chairman of HRAB said that on an average around Nu 100mn to Nu 120mn is being forgone.

During the press conference last week, minister of foreign affairs Dr. Tandi Dorji said that since the service sector was impacted with the outbreak of the disease, some fiscal measures will be implemented.

The Executive Director of Association of Bhutanese Tour Operator, Sonam Dorji said that since the outbreak of the COVID-19 in the world, from the third week of January the tourism sector has been affected in the country.

He said from the months of January, February and March about 80% of the tourists made cancellation.

“However, we are not making any complaints to the government. We understand the situation. We are working in coordination with the government, Tourism Council of Bhutan, how they can help and what are the options,” Sonam Dorji said.

He said that if the restriction on tourists is lifted, it will be difficult for the service sector to come in shape, because only minimal tourists might be visiting.

Similarly, the Chairman of Guide Association of Bhutan (GAB), Garab Dorji said that around 4,500 guides will be jobless in the country.

He said in the usual days around 20% to 30% of the guides are always jobless. In the current situation only about 30 to 40 guides are engaged.

He said that if the situation of the COVID-19 prolongs almost all the guides will be jobless till late September.

“We are planning to keep guides engaged by giving them trainings during this period,” he said.

Tourism industry is the second highest revenue contributor to the government. In 2018, the government earned revenue worth more than US$85mn, of which more than US$ 26mn went into the government coffer.

Dechen Dolkar from Thimphu