Myanmar Tourism Sector Needs More Govt Support During COVID-19: New Survey

By Nan Lwin 27 May 2020

YANGON—A new survey on the impacts of COVID-19 on the Myanmar tourism sector has revealed that over 80 percent of micro, small and medium-sized tourism businesses (MSMEs) are ‘extremely badly’ affected by the pandemic, while confidence in the government’s ability to provide sufficient support for businesses is very low.

The survey, backed by the Ministry of Hotels and Tourism (MOHT) and carried out by Luxembourg Aid and Development and the Luxembourg Agency for Development Cooperation, said all tourism MSMEs have been significantly impacted by a lack of customers, income and financing.

The survey represents 57 valid responses from eight MSMEs in tourism and related sectors across six states and regions—95 percent of responses were from Yangon and Mandalay regions and Shan State, the most popular areas for tourists.

The survey said almost 90 percent of tourism-related MSMEs have seen decreased revenues. Almost 80 percent had very little business and 60 percent had to reduce their workforce, either by laying off staff or putting staff on furlough or unpaid leave following travel restrictions due to COVID-19.

Moreover, 42 percent have increasing debt due to lack of cash flow and another 42 percent also had trouble with their supply chains due to border and airport closures.

The survey said 40 percent of respondents had decreased productivity, with 28 percent seeing decreased efficiency due to work-from-home or other factors. Thirty-three percent had cost increases and 37 percent had closed branch or regional offices—30 percent of respondents said they have had to close down their business operations completely.

Tourism business say current government support isn’t enough

Respondents were also asked if they believed the current government support is sufficient to help tourism-related businesses minimize the impact of COVID-19.

The survey revealed that confidence in the government’s ability to provide sufficient support is very low: only 5 percent said they believed this was the case while 21 percent said they do not have confidence in the government.

The survey found that the government also faces a challenge as far as giving clear information and direction for tourism business, as 53 percent of MSMEs stated that they did not know what government support is available and 21 percent said it is hard to know, as the situation is constantly changing.

In late March, the government set up a 100-billion-kyat (US$71.3 million) COVID-19 fund for local businesses, particularly small and medium-sized enterprises and the garment and manufacturing (cut-make-package) and hotel-and-tourism sectors. The fund offers loans at a 1 percent interest rate. The government’s COVID-19 Economic Relief Plan (CERP) also committed to increasing the size of the fund to 200-500 billion kyats, depending on the market response, by the end of 2020.

Financing, tax breaks key to keeping tourism businesses open, workers employed

MSMEs were also asked to share their main concerns going forward and describe what type of support they most need to help their business survive and operate.

Almost 70 percent of respondents said the most important step the government could take would be to waive taxes and other financial payments immediately. Moreover, 63 percent said it is crucial for the government protect the livelihoods of workers through financial help.

As far as financing, 60 percent of respondents said that interest-free loans would help them recover and continue business. A slightly smaller portion of respondents, 47 percent, suggested cash assistance for the tourism sector and 28 percent said they supported the government pausing or reducing loan payments.

Business owners and managers, on average, said they have retained almost 70 percent of their staff, although over 90 percent are working reduced hours, almost 70 percent are on reduced salaries and over 60 percent have been sent on leave.

In April, MOHT announced that hotels and tour and travel businesses will be exempt from license fees for one year as the sector continues to struggle.

Further funding, communication and planning needed to save tourism sector

However, people in the tourism sector have voiced criticisms, saying that current loans and exemptions are not sufficient to revive all tourism-related businesses. Since February, the tourism sector has been hit the hardest by the pandemic, due to travel restrictions. The pandemic is expected to cut tourism revenue for the year in half.

“The loan amounts are very small compared with those in other countries,” U Win Min of the Myanmar Center for Responsible Business (MCRB) told The Irrawaddy. “We will need a more aggressive injection for the tourism sector to revive business.”

“The most important thing is that many local tourism businesses still lack information about the loans program supported by the government. They do not know how to apply for a loan or whether they are available. The government needs to put more effort into sharing the information with the local businesses,” U Win Min said.

“The government also needs to prepare to promote the tourism sector, post-COVID-19. International travelers won’t immediately come to visit other countries, including Myanmar, as soon as the pandemic is over. So, we need to think about how to promote local tourism in sustainable ways,” he stressed.

Meanwhile, the Myanmar Tourism Entrepreneurs Association (MTEA) also proposed a plan to MOHT to request a loan of around 50 billion kyats (US$35.7 million) from the government in order to keep thousands of skilled workers in the local tourism industry employed during the pandemic.

According to the ministry, it has been launching resilience packages, including capacity building trainings, for tourism-related businesses. The ministry is also drawing up a recovery plan for Myanmar’s tourism sector with the support of the World Tourism Organization (UNWTO).

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