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Cambodia: Covid impact 1,200 tourism firms closed, 22,000 jobs lost
Nearly 1,200 establishments in the tourism industry were closed and almost 22,000 direct jobs have been lost as of May this year due to the Covid-19 in Cambodia, according to a statement from the Ministry of Tourism.
Among the 1,196 tourism businesses, 498 have been closed and 698 have been suspended, resulting in the loss of 21,998 direct jobs in the industry, the officials said.
Chhun Makara, director of travel agency, transport and tourism guide department at the tourism ministry, told Khmer Times that 14 tourism and hospitality services were permanently closed and the suspended establishments include hotels, guesthouses, restaurants and travel agencies.
Thirty hotels, 155 restaurants, 148 guesthouses and 96 travel agencies have been permanently closed, while 226 hotels, 146 guesthouses, 181 restaurants and nine travel agencies have been suspended as of the end of May this year, Makara said.
He said that the owners of suspended tourism establishments were concerned about the collateral requirement for loans.
“Currently, we face challenges including labour shortage and lower tourism skills. Seeking strategies to attract former labour to return is among the top priorities for recovery in the tourism sector,” Makara said.
Tourism establishments, especially hotels and guesthouses have been contacting and calling their former employees to return.
“We will soon release a set of strategies to attract former employees. But the priority now is to attract more tourists because more guests can create good jobs in the establishments and then hopefully, former employees will come back to work,” he said.
Song Tong Hap, secretary of state at the tourism ministry, said tourism establishments can apply for loans with financial institutions that participate in the credit guaranteed scheme launched by the government in September last year through the state-owned Credit Guarantee Corporation of Cambodia (CGCC) as guarantor — to get loans up to $400,000 at a concessional interest rate of 6.5 percent.
“This scheme will help tourism establishments that look for loans from participating financial institutions for recovery without collateral. Both the co-financing package of the government and the uncollateralised scheme will be very important financial tools to support tourism recovery,” Tong Hab said.
Tong Hab, who is also the head of the enterprise and employment protection working group at the tourism ministry, said the uncollateralised financing is expected to support Cambodia to attract seven million international tourists in 2025 and 11 million local tourists next year.
The credit guaranteed scheme was launched as the participating banks and microfinance institutions in Cambodia can provide loans with CGCC as a guarantee to local businesses aiming at sharing risks and promoting inclusive finance with an initial equivalent capital of $200 million from the government.
No Lida, deputy CEO of CGCC, said owners of tourism establishments in Cambodia need to fulfill three main requirements to get approval for loans. The business has to be owned by Cambodian national who holds at least more than 50 percent of shares, had or has businesses registered legally and has the ability to make repayment.
“Tourism business owners can discuss with participating financial institutions to apply for loans in the co-financing scheme to confirm whether they require a letter of guarantee and then they can ask CGCC for the document,” Lida said.
However, Makara said tourism businesses have not well been aware of the mechanism of lending by financial institutions without the requirement of collateral under the government’s intervention package of $150 million for tourism.
“It does not mean that when you apply for a loan, all will get the loan. Some applications would be rejected and some would be approved. For example, even though you have the ability to repay, you do not have collateral. So, those who do not have collateral but have the ability to repay are the target of financing without collateral mechanism,” Makara told this newspaper.
Last month, the government released a financial intervention package of $150 million — comprising $75 million from the government through SME Bank and $75 million from other financial institutions — to revive the tourism sector by financing businesses affected by the Covid-19 pandemic in the last two years.
The tourism recovery co-financing scheme is aimed at financing businesses in the sector. The scheme will help businesses resume operations, renovate and modernise services. It will also help expand and diversify tourism services.
Tourism minister Thong Khon said Cambodia’s tourism had been severely affected by Covid-19 over the last two years. For 2020 and 2021, Cambodia received only 1.5 million international tourists.
“Even though Cambodia’s tourism has continued to recover gradually, the ministry has noticed that the number of establishments in the industry grew slowly,” he said.
Source: https://www.khmertimeskh.com/501101471/covid-impact-1200-tourism-firms-closed-22000-jobs-lost/