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Tourism bunkers down for years-long recovery

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Cambodia Association of Travel Agents (CATA) president Chhay Sivlin. Hong Menea

Tourism bunkers down for years-long recovery

The global health crisis instigated by the Covid-19 epidemic has slowed the tourism sector in every country in the world to a virtual standstill for most of 2020.

And Cambodia’s too has been brought to its knees, with just over 1.26 international tourist arrivals in the first 10 months of this year, marking a 76.1 per cent plunge from the more than 5.26 million registered in the same period last year.

The government has launched a raft of major economic stimulus measures to help the embattled sector, including temporary tax relief for businesses and orders to banks to consider restructuring debts.

And even as the pandemic squeezes state coffers, the government also rolled out ambitious infrastructure projects, such as those in Preah Sihanouk and Siem Reap provinces, in a bid to lift tourism out of its current predicament.

The Post staff reporter Hin Pisei interviewed Cambodia Association of Travel Agents (CATA) president Chhay Sivlin to hear her professional insights into the general panorama of the conditions and challenges for the Kingdom’s Covid-19-era tourism industry, the government’s response mechanism and its expectations for 2021, when mass vaccination campaigns around the world will presumably be underway.

Could you paint a brief picture of the Cambodian tourism industry’s current state?

The Covid-19 epidemic crisis, which first broke out in late 2019 in China, has triggered a sharp decline in global tourist arrivals.

In the first 10 months of 2020, the number of international tourists visiting Cambodia decreased by almost 80 per cent compared to the first 10 months of 2019, according to the Ministry of Tourism. And the number of domestic tourists has dropped a great deal, too.

Before the onset of Covid-19, the tourism sector in Cambodia was on a substantial upsurge. As far as I know, there were about 700 travel companies and agencies doing business in Cambodia at the time.

But hamstrung by the long-lasting outbreak, a large number of tour companies have buckled under the relative paucity of tourists entering and leaving the country, leading to a lull in operations with no capital to support them. Some firms have been riddled with debt.

And what has the government done in response?

In a bid to give the tourism industry a helping hand, the Cambodian government has so far introduced six rounds of measures, including offering $40 monthly per each employee that was suspended or laid-off, multifarious monthly tax exemptions for the tourism sector, an extension on payments of social security pension obligations, and patent tax exemptions until the end of December 2020. In addition, the state will also waive tourism licence fees for 2021.

While we are very pleased with the measures that the government has afforded to the tourism industry, they are still not enough to maintain the sector’s sustainability in the wake of nearly a year of dealing with the health crisis.

This has depleted tourism businesses’ reserves and resources that had been allotted for the retention of skilled staff, costs of operations and electricity – with some of them fretting over yet-unresolved cases of malfunctioning electricity meters, major audit requirements for operations in the year-ago period, and charges for unbilled back taxes from prior years.

Although the debt was incurred in previous years, we’ve spent all of our money in the nearly one year since Covid-19 broke out and have nothing with which to pay off the dues owed to the General Department of Taxation that have accumulated over three-to-four years, before being adjusted by a “comprehensive audit” (as outlined in Prakas 270 on Tax Audits).

What more can the government do to help tourism businesses?

On behalf of the tourism industry, we eagerly await further assistance from the Royal Government vis-a-vis the exemption of all tax liabilities for previous years, which will shore up businesses and guarantee their sustainability, and we request that the state help disburse the budget and provide loan packages at lower interest rates than those offered at private banks.

This’ll help business owners retain the tourism professionals with decades of training and experience, as the sector can only grow and compete internationally if we have the virtuosos with the talent to design fascinating tours and provide top-notch hospitality, so that we may garner more attention from developed countries.

As a very memorable 2020 draws to a close, where do you think the sector is headed for in the coming year?

Going into 2021, I feel that tourism could recover a smidge if most of the people around the world can get their hands on Covid-19 jabs. But as travel hinges on the configuration of economic, safety and health settings, we are all too well aware that tourism is the most fragile and vulnerable sector.

And construction on the government’s new infrastructure projects in Preah Sihanouk and Siem Reap provinces will undoubtedly go a significantly long way toward luring in international tourists to Cambodia once the Covid-19 crisis ends.

I anticipate that the tourism sector in Cambodia will need at least another five years to rebound and once again enjoy 2019-levels of international tourists.

This interview has been edited for length and clarity.

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