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Covid-19 and the Tourism Sector: a Comparison of Policy Responses in Asia Pacific

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Covid-19 and the Tourism Sector: a Comparison of Policy Responses in Asia Pacific COVID-19 AND THE TOURISM SECTOR: A COMPARISON OF POLICY RESPONSES IN ASIA PACIFIC COVID-19 AND THE TOURISM SECTOR: A COMPARISON OF POLICY RESPONSES IN ASIA PACIFIC 1 DISCLAIMER All rights reserved. No part of this publication may be reproduced in any form or by any electronic or mechanical means, including information storage and retrieval systems, without permission in writing from authorised personnel from the Pacific Asia Travel Association, except by accredited media who may quote brief passages in an article, with appropriate sourcing to PATA. This publication is intended to provide accurate information and includes material from sources considered to be reliable. It is provided with the understanding that the Pacific Asia Travel Association (PATA), a not- for-profit organisation and the author are not rendering any professional services, disclaim any warranty concerning information provided, assume no liability for advertising claims and reserve the right to accept or reject any advertising. PATA welcomes suggestions for corrections or changes. Statements and opinions expressed in this publication do not necessarily represent those of PATA, which assumes no responsibility for editorial content. It should also be recognised that with this COVID-19 and the Tourism Sector: A Comparison of Policy Responses in Asia Pacific, while the data used were accurate at the time of compilation and subsequent release, some changes due to revisions and/or changes in collection and weighting techniques may have occurred since publication. For the latest updates please contact the Crisis Resource Center directly ([email protected]). Copyright Pacific Asia Travel Association, Bangkok 2020 ISBN (e-book): 978-616-93614-2-8 Allied Partners - National No charge – a membership benefit Aviation - Levels I & II No charge – a membership benefit Corporates - International No charge – a membership benefit Corporates - Multinational No charge – a membership benefit Governments - Level I No charge – a membership benefit Governments (National) - Level II No charge – a membership benefit Preferred Partners No charge – a membership benefit Premier Partners No charge – a membership benefit Strategic Partners No charge – a membership benefit Other PATA Members Complimentary PATA Chapter Members Complimentary Non-Members Complimentary Chapters, libraries and academics seeking multiple copies, please contact [email protected]. The Crisis Resource Center (CRC) is a digital resource that was launched by the Pacific Asia Travel Association (PATA) in 2020 in response to our member’s urgent need for crisis leadership. The vision of the CRC is to lead, coordinate and sustain a comprehensive world-class digital resource for crisis response, management, and recovery for the Asia Pacific Travel Industry. For more information, please visit us at crc.PATA.org or contact us directly at [email protected]. COVID-19 AND THE TOURISM SECTOR: A COMPARISON OF POLICY RESPONSES IN ASIA PACIFIC 1 CONTENTS PREFACE 4 EXECUTIVE SUMMARY 5 PART I: OPPORTUNITIES FOR DEVELOPMENT PARTNER ENGAGEMENT 7 PART II: CAMBODIA 9 COVID-19'S ECONOMIC AND TOURISM SECTOR IMPACT 10 EARLY RESPONSE AND PUBLIC HEALTH MANAGEMENT 10 SUPPORT FOR ECONOMIC RESILIENCE AND SMES 11 ENHANCED SUPPORT FOR THE TOURISM SECTOR 12 REVITALIZATION POLICIES AND PLANS 12 GREEN GROWTH AND SUSTAINABILITY MEASURES 13 POLICY IMPACT, GAPS AND OPPORTUNITIES 13 KEY RECOMMENDATIONS AND AREAS FOR DONOR SUPPORT 14 PART III: NEPAL 15 COVID-19'S ECONOMIC AND TOURISM SECTOR IMPACT 16 EARLY RESPONSE AND PUBLIC HEALTH MANAGEMENT 16 SUPPORT FOR ECONOMIC RESILIENCE AND SMES 17 ENHANCED SUPPORT FOR THE TOURISM SECTOR 18 REVITALIZATION POLICIES AND PLANS 18 GREEN GROWTH AND SUSTAINABILITY MEASURES 19 POLICY IMPACT, GAPS AND OPPORTUNITIES 19 KEY RECOMMENDATIONS AND AREAS FOR DONOR SUPPORT 20 COVID-19 AND THE TOURISM SECTOR: A COMPARISON OF POLICY RESPONSES IN ASIA PACIFIC 2 CONTENTS PART IV: SRI LANKA 21 COVID-19'S ECONOMIC AND TOURISM SECTOR IMPACT 22 EARLY RESPONSE AND PUBLIC HEALTH MANAGEMENT 22 SUPPORT FOR ECONOMIC RESILIENCE AND SMES 23 ENHANCED SUPPORT FOR THE TOURISM SECTOR 23 REVITALIZATION POLICIES AND PLANS 24 GREEN GROWTH AND SUSTAINABILITY MEASURES 25 POLICY IMPACT, GAPS AND OPPORTUNITIES 25 KEY RECOMMENDATIONS AND AREAS FOR DONOR SUPPORT 26 PART V: THAILAND 27 COVID-19'S ECONOMIC AND TOURISM SECTOR IMPACT 28 EARLY RESPONSE AND PUBLIC HEALTH MANAGEMENT 28 SUPPORT FOR ECONOMIC RESILIENCE AND SMES 29 ENHANCED SUPPORT FOR THE TOURISM SECTOR 30 REVITALIZATION POLICIES AND PLANS 30 GREEN GROWTH AND SUSTAINABILITY MEASURES 31 POLICY IMPACT, GAPS AND OPPORTUNITIES 31 KEY RECOMMENDATIONS AND AREAS FOR DONOR SUPPORT 32 PART VI: VIETNAM 33 COVID-19'S ECONOMIC AND TOURISM SECTOR IMPACT 34 EARLY RESPONSE AND PUBLIC HEALTH MANAGEMENT 35 SUPPORT FOR ECONOMIC RESILIENCE AND SMES 36 REVITALIZATION POLICIES AND PLANS 36 ENHANCED SUPPORT FOR THE TOURISM SECTOR 36 GREEN GROWTH AND SUSTAINABILITY MEASURES 37 POLICY IMPACT, GAPS AND OPPORTUNITIES 38 KEY RECOMMENDATIONS AND AREAS FOR DONOR SUPPORT 39 COVID-19 AND THE TOURISM SECTOR: A COMPARISON OF POLICY RESPONSES IN ASIA PACIFIC 3 PREFACE The COVID-19 pandemic presents an existential threat to the global travel and tourism industry. Tourism constitutes 10.4 percent of global Gross Domestic Product (GDP) and one out of 10 jobs worldwide.1 As international travel has ground to a halt, every single facet of the industry has been impacted by the crisis, and its value chain has been severely hit as countries have been forced to discourage both international and domestic travel. The magnitude of the impact is immense in terms of the potential shrinkage of revenues, GDP and jobs. According to the World Travel & Tourism Council (WTTC) as many as 100 million jobs are at immediate risk globally, and the sector stands to contract as much as US$ 2.7 trillion. The Asia Pacific faces a proportionate threat to its US$ 2.97 trillion tourism economy and 182 million tourism jobs (2019). This report aims to aid tourism recovery by providing policymakers and donors innovative and best practice examples of policy response. The authors studied policy responses in five developing destinations spread across South and Southeast Asia: • Cambodia; • Nepal; • Sri Lanka; • Thailand; • Vietnam. The authors conducted a practical policy review of the destinations’ responses, focusing on five dimensions: • Early response and public health management; • Support for economic resilience and small and medium enterprises (SMEs); • Enhanced support to the tourism sector; • Tourism sector revitalization policies and plans; • Green growth and sustainability measures. The authors relied primarily on desk research as the countries’ policy responses have been well- documented in media reports and other public sources. To validate and enrich findings, interviews were also conducted with key industry leaders or policymakers from national tourism organizations or other well-placed stakeholders. In consultation with interviewees, the authors have also identified gaps in the destinations’ policy responses and opportunities for donor support and assistance. The COVID-19 pandemic represents an unprecedented crisis for the tourism industry and the millions of people across the Asia Pacific whose livelihoods depend on it. The authors of this report believe that an orderly and strategic policy response can mitigate the worst of the crisis’s negative impacts. In some cases, policy may even lay a foundation for healthier, more sustainable post-pandemic growth . 1 https://www.weforum.org/agenda/2020/05/tourism-industry-slump-recovery-coronavirus-lockdown/ COVID-19 AND THE TOURISM SECTOR: A COMPARISON OF POLICY RESPONSES IN ASIA PACIFIC 4 EXECUTIVE SUMMARY Destinations in South and Southeast Asia are struggling to contain the effects of the COVID-19 pandemic’s shock to their tourism industries and economies. 2020’s inbound visitor arrivals are expected to decline nearly 80 percent2. The COVID-19 pandemic has meant millions of job losses, the closure of small and medium-sized enterprises (SMEs), and hard times for the vulnerable communities that rely on tourism.3 Many tourism SMEs will not survive, and some larger national and international players are at risk. The travel and tourism sector that emerges from the crisis may look quite different to that which preceded it. SMEs made up 4/5 of the pre-crisis tourism economy4, and many of those operated on thin margins. As a result, the unprecedented pause in tourism has forced many countries and destinations to start reassessing their business models based on ever-increasing tourist numbers and to plan for an increased focus on sustainable tourism in the future. Governments have employed a range of fiscal and monetary measures in support of the travel and tourism sector. The aim has been to help enterprises in preventing closures where possible and ensuring that tourism workers will have jobs to return to when the COVID-19 crisis is over. Typical policy interventions have included the waiving of taxes; the easing of regulatory burdens, fees, and charges; the provision of cash grants and subsidies to retain employees; and various other forms of direct support to firms. To help the industry to retain jobs and prevent the loss of vital human capital and skills, some countries have provided incentivized training support to specific tourism sub-sectors, such as food services, hotels, and airlines. Government commitments range widely from 2 to 12 percent of GDP, with larger investments predictably yielding better results. Vietnam and Thailand have invested heavily in total stimulus. Cambodia, Nepal, and Sri Lanka – with smaller tourism economies – have fielded smaller stimulus packages. Countries with proportionally more stimulus as a percentage of GDP have managed the crisis relatively well. Cambodia Nepal Sri Lanka Thailand Vietnam Revenue from the tourism 4.92 bil 2.2 bil 5.6 bil 51 bil 33 bil sector as of 2018/19 in US$ % of GDP 12.1% 7.9% 12.5% 17% 9.2% Economic impact of the pandemic (estimated % of 80% 80% 80% 80% 80% revenue loss from tourism against 2019) % of GDP pledged to 4% 4.2% 2% 12% 9% pandemic response 2 Ibid.,1 3 Zurab Pololikashvili, Secretary-General of the UNWTO 4 Abe, M., M.
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