There is bad news for the workforce in Myanmar as the Union of Myanmar Travel Association (UMTA) has feared that over 50 percent of the people employed in the hotel and tourism industry may lose their jobs because of COVID-19.
UMTA chairman U Naung Naung Han said many have made 50 to 70 percent of their staff redundant while others have reduced salaries as all hotels and tour operators have been forced to suspend operations.
“As they are just focusing on survival, some companies have downsized. But some others which only have a workforce of 10 or so can’t further downsize. So they have reduced salaries,” he said.
The UMTA estimates that around 800,000 people are directly employed in hospitality and the total number may be between 1.2 million and 1.5 million if indirect employment from services related to tourism, like horse carts, motorboats and weaving, is counted.
“Meanwhile, those who can’t hold out will have to leave their businesses. I am afraid the situation will get worse in May and June,” said U Naung Naung Han.
The rainy season, which usually starts in mid-May and lasts until October, is low season in Myanmar. U Naung Naung Han predicted than more than 500,000 people in the hospitality sector may lose their jobs.
“In March, most [tour operators and hoteliers] paid from 70 to 100 percent of salaries to their employees. In April, some will only pay between 20 and 50 percent. And the situation could get worse in May,” said UMTA vice-chairman U Khin Aung Tun.
The global COVID-19 impact may mean Myanmar’s tourism industry is unlikely to return to normality until 2023, according to tour operators, even if the coronavirus spread is controlled within the country.
Economic turmoil in Europe would mean falling visitor numbers for several years, tour operators predicted.
“As health and food will take priority, I am sure group tours will decrease significantly,” said U Khin Aung Tun.
The UMTA predicted that even if COVID-19 can be controlled quickly in Myanmar, it will take six months for just 10 percent of the tourism industry to restart operations. It will take at least nine months for the entire sector to be operational again.
“To take advantage out of this crisis, we are providing capacity building training to employees and re-designing our tour packages to improve our services,” U Myo Min Oo, president of Bagan Myanmar Tour Co., told The Irrawaddy.
His company has neither cut staff nor reduced salaries so far, he said.
“The government is doing what it can for businesses to recover. But it has many things to do. So we are making preparations by envisaging how things can develop,” he added.
In March, the government set up 100 billion kyats (US$70 million) in funding to provide loans to businesses that have been badly hit by COVID-19.
It said it would provide loans to the most vulnerable factories, including garment makers, and hotel and tourism businesses, as well as domestically owned small- and medium-sized enterprises. It has so far provided loans to over 200 businesses at a 1 percentage point interest rate.
However, some tour companies have declined to take the loans as they could not get the amount they applied for and were only granted a much smaller amount.
A total of 4 million travelers from over 30 countries visited Myanmar in 2019.