- Tourism sector losses Tk600b in 2020 during pandemic
- The sector suffered 1.1 lakh job losses amid the pandemic
- Recovery at a snail's pace due to lack of stimulus support
- Fiscal stimulus and low interest loans recommended for quick recovery
The tourism and hospitality sector lost about Tk60,000 crore turnover in 2020 due to the Covid pandemic, says a study of Bangladesh Institute of Development Studies (BIDS).
The sector would have witnessed about Tk1.5 lakh crore turnover in 2020 if there was no pandemic, but the turnover was around Tk95,000 crore in that year, revealed the study published on Sunday at a seminar at BIDS auditorium at Agargaoan in the capital.
The transport, hotels and resorts, and restaurants respectively accounted for 40%, 29% and 25% of the loss.
Despite the huge losses, recovery of the sector is progressing at a snail's pace due to the lack of stimulus support from the government.
The study, "The covid-19 pandemic and hospitality and tourism sector in Bangladesh", says that the recovery of the sector was slow as the net operating surplus (sales revenue minus cost) was negative in all sub-sectors including the hotel and resort, travel agency and tour operator. Besides, travel agencies and amusement parks operated for a very few days which is another reason behind the poor recovery of the sector.
Only exception is the transport sector which is bagging only 70% of pre-Covid profits, finds the study. Although sales of the restaurants and tourism SMEs have recovered largely, they are barely surviving, according to the study.
BIDS Director General Binayak Sen said, "According to findings, the business loss was 70-80% in the first quarter of 2020, but in the last quarter of the year it came down to 30%. If the period of the study was extended to June 2021, I think the recovery rate would have been much higher."
"The government has given wage subsidies to the garment sector during the pandemic. Although the tourism sector has suffered equally, it did not receive any such incentive. But the sector deserves pandemic stimulus. If adequate stimulus was provided, the recovery would have been faster," he added.
He said the Covid-sensitive sectors should be identified and brought under the scheme of incentive packages.
In collaboration with Bangladesh Tourism Board (BTB), BIDS conducted a primary survey with 200 star hotels and resorts, 138 travel agencies and tour operators, 200 restaurants and 63 tourism SMEs of eight divisional cities and Cox's Bazar.
Besides, case studies involving 21 transport owners and operators, and owners and employees of seven tourist attractions and recreational centres were also included in the study conducted between March and April last year.
"The enterprises under the sector perceive that recovery of losses due to the Covid-19 pandemic is almost impossible without assistance from the government. The sector needs mainly two types of support: fiscal stimulus and access to low interest loans," said Dr Mohammad Yunus, senior research fellow of BIDS and also the lead researcher of the study.
"Fiscal incentives or credit facilities at easy terms and conditions will help the sub-sectors to recover from the impacts of the pandemic," he added.
Masud Hossain, a tour operator, said, "Before the pandemic, where I used to spend Tk30-35 lakh for business cost and salary of employees. Now, it has come down to Tk3.5 lakh as I was forced to sack my employees and close down my luxurious office."
"If I had got bank support, my business would not have incurred so much losses," he added.
According to the study, the sector would have about 3.3 million jobs at present if there was no pandemic. But, in reality, it has 3.2 million jobs now, which means that the sector suffered 1.1 lakh job losses amid the pandemic. The restaurant and transport agencies accounted for more than 90% of those jobs.
The tourism and hospitality sector – one of the industries hit the hardest by the Covid-19 pandemic due to all the border closures, travel restrictions and lockdowns – is facing an existential threat amid a lack of support from banks.
Travel agents, tour operators, tour guides, Hajj and Umrah agencies, hoteliers and restaurant owners, resort and amusement park owners, aviation and transportation (vehicles and vessels) owners are among the stakeholders of the tourism and hospitality sector.