The Guyana Tourism Authority (GTA) estimates that 30% of those employed in the local tourism sector have lost their jobs and an additional 36% have been furloughed or placed on unpaid leave, as a result of systems put in place to tackle the COVID-19.
In a sector analysis released to the media Monday, the GTA predicted that 50% of tourism businesses will be closing their doors permanently if no financial support is put in place.
“As a result, the GTA is strongly advocating for vital measures to protect the livelihoods of those 22,000 Guyanese who rely directly or indirectly on travel and tourism from the Ministry of Finance,” GTA said in its statement.
They want policymakers to waive VAT, PAYE, NIS payments or extend the timelines by six months, provide VAT exemptions and waive taxes on the travel and tourism sector with immediate effect for a minimum of 12 months, provide direct disbursements to businesses to cover employment costs.
It further calls for the provision of no-interest loans, loan guarantees, and loan forgiveness for tourism businesses as a stimulus to prevent them from closing their doors.
See full statement below:
The Financial Impact of COVID-19 on Guyana’s Tourism Sector Guyana Tourism Authority Concludes Sector Analysis
Georgetown, Guyana (April 6, 2020): Globally, the tourism sector is currently one of the hardest-hit sectors due to the outbreak of COVID-19, with impacts on both travel supply and demand resulting from travel bans, quarantine measures, and border closures. Based on a detailed analysis undertaken by the Guyana Tourism Authority (GTA) involving a survey of 36 percent of the tourism sector, COVID-19 will also have considerable implications for Guyana’s tourism industry and economy. As a result, the GTA is strongly advocating for vital measures to protect the livelihoods of those 22,000 Guyanese who rely directly or indirectly on travel and tourism from the Ministry of Finance.
Calculating the Impacts of COVID-19 on Tourism
According to the World Travel and Tourism Council, with the current situation, global travel bans and social distancing, tourism GDP loss to the world economy will be up to US$2.1 trillion in 2020. Based on the sector analysis undertaken by the GTA, the loss in direct expenditures within Guyana’s economy is estimated to be a minimum of GY$32.8B in 2020 in export earnings. Based on the average Gross Domestic Product multiplier for tourism, which is two, the overall economic impact from COVID-19 will be much higher totalling an estimated GY$98.4 in losses in 2020. This excludes travel-related taxes from international arrivals and departures (e.g., travel and departure taxes).
By April 2020, Guyana’s tourism sector lost an estimated 46% of their total revenue over a six-month period in contrast to the revenue earned for the same period in 2019. Based on current projections, this could lead to 50% of tourism businesses closing their doors permanently if no financial support is put in place. In terms of jobs, an estimated 30% of those employed in Guyana’s tourism sector have lost their jobs and an additional 36% had been furloughed or placed on unpaid leave.
Based on the social and economic implications of this economic shock, the GTA is encouraging the Ministry of Finance and policymakers to work towards identifying low-cost financial support and supplemental financing options for the tourism sector over the near term, including those available from international financial institutions. The top 5 actions that are most critical to business survival and sustainability identified in the analysis include:
- Waive VAT, PAYE, NIS payments or extend the timelines by six months to make those payments through a reassessment of the recovery period to improve cash flow and allow businesses to use cash to save jobs and keep businesses afloat.
- Provide VAT exemption and waive taxes on the travel and tourism sector with immediate effect for a minimum of 12 months or until the economic situation returns to normalcy to mitigate losses and allow businesses to use cash to save jobs and keep businesses afloat.
- Provide direct disbursements to businesses to cover employment costs, and/or unemployment payments to qualified travel and tourism employees and other Guyanese who are earning less than GY10M a year and who are at risk for facing severe economic hardships.
- Reopen the ports of entry after putting into place restrictions for passengers on flights to Guyana and adequate systems to facilitate the orderly medical screening and, as necessary, the quarantine and monitoring of arriving passengers who have or may have been exposed to the virus.
- Provide no-interest loans, loan guarantees, and loan forgiveness for tourism businesses as a stimulus to prevent them from closing their doors for an extended period and to support product improvements
A failure to act will have adverse implications for the fiscal and debt sustainability of hundreds of tourism businesses and put at risk the hard-won gains achieved by the GTA and sector over the last two years.
Taking Action to Support the Tourism Sector
The analysis of the Financial Impact of COVID-19 on Guyana’s Tourism Sector is one of the key activities the GTA is undertaking to support the sector. The GTA is also implementing a Resiliency Strategy & Tourism Sector Support Plan which includes: –
- Keeping the tourism connected and up-to-date on the latest information that has a direct impact on the sector via the Guyana Travel Advisory, GTA Facebook page and GTA WhatsApp
- Encouraging the sector to adapt to new norms, implement revised cancellation policies; advocate for their clients to “postpone, don’t cancel”; and increase the level of engagement with their clients and partners.
- Formulating a Rebound Marketing Action Plan to be rolled out immediately after this crisis has passed. (And it will!)
- Keeping destination Guyana top of mind among international travellers through digital platforms, storytelling, and media and trade engagement with a focus on inspirational content.
- Ramping up our virtual meetings and sector engagements for product development, training, and licensing activities.
- Waiving GTA Registration and Licensing Fees and GTA-led Training Programme Fees for a period of 6 months beginning April 1, 2020.
- Offering one-on-one business advice to local tourism businesses and communities.
