Some travel agencies are now considering to permanently close their businesses in the wake of huge losses they incurred due to the pandemic, according to a lead tourism stakeholder.
In an interview with the Manila Bulletin, Ritchie Tuano, president of the Philippine Travel Agencies Association (PTAA), said that around 95 percent or 419 out of the 439 travel agency members have temporarily closed their businesses, with some considering permanent shut down.
He said this accounts to nearly 4,000 employees in the industry who were directly hit by the temporary closure, noting that around 200 workers have already been laid off.
“This is temporary for now but some of our members are already thinking of permanently shutting down their business. With the problem of liquidity now being more felt, a dilemma unfolds with the employers of letting go employees due to the affordability issue of paying salaries and yet laid off employees are subject to separation benefits,” he emphasized.
With no clients coming in, Tuano said not only employees, but also travel agency owners and managers, have ventured into online selling to earn some money and cope with the ongoing health crisis. He said they sell everything to make ends meet --from medical equipment and supplies, food, to sanitizing products and services, and the like.
Tuano said the PTAA has already made recommendations to the Department of Tourism (DOT) since March and the department have likewise shared it with the Congress during the formulation of the Philippine Economic Stimulus Act (PESA) Bill.
“The DOT, on their own effort, have made representation on behalf of the tourism stakeholders with the DBP (Development Bank of the Philippines) and Landbank of the Philippines for loans with friendlier terms. This has been helpful to those who are able to restart their businesses,” he said.
In a separate interview aired over CNN Philippines, where Tuano also appeared to discuss the current challenges the industry, House Committee on Ways and Means Chairman Joey Salceda said P58 billion of the P1.3 trillion stimulus package have been allotted to the tourism sector, specifically targeting the recovery of tourism and tourism-related industries. He said this would include interest-free loans, enhancement and renovation of tourist facilities, among others.
But Tuano said: “Loans are currently not a solution for us travel agents as it will only add up to our liabilities. If it is a loan, we need to pay back for it soon probably even before we start earning an income.”
Rather, he suggested some immediate intervention that would help them recover, such as the waiving of LGU (local government unit) related fees, tax relief for both local and national level, continued moratorium at an extended period of time of outstanding loans and credit card billings, as well as employer salary and office rental subsidies.
“We are really in a bad shape as of the moment. The travel and tourism sector as you said has been badly affected,” he said.
Tourism chief Bernadette Romulo-Puyat previously said that the Department of Finance has already rolled out its subsidy program which was able to help about 630,000 of tourism stakeholders. However, she said it was not enough for the needs of all the affected tourism players.