Tourism groups send SOS: Save hotels, travel firms

MANILA, Philippines — A business leader has asked the Department of Tourism (DOT) to relax the rules on loans extended to travel firms that suffered losses from the cancellation of holiday trips due to the pandemic.

Rajah Tours Philippines founder Alejandra Clemente told The STAR that she wrote to DOT about her request for the agency to amend the regulations on loans offered under Bayanihan 2.

Clemente said tourism firms, including operators, are now suffering from the absence of foreign travelers due to a blanket ban enforced by the government on leisure trips.

“What happened to the P6-billion subsidy by way of loans as working capital for tourism? DOT as mandated under the law will provide the guidelines of the loans. This program is intended for the micro, small and medium enterprises (MSMEs) in tourism,” Clemente said.

Tourism has endured one of the worst blows among all sectors of the economy, as travel had to pause due to mobility restrictions applied by the government to manage the pandemic.

Last year, its gross value added declined by more than 61 percent to P973.31 billion, from P2.51 trillion in 2019, according to data from the Philippine Statistics Authority. This was the lowest that tourism generated in 11 years since the P868.23 million recorded in 2009.

Further, tourism’s share in GDP sank to 5.2 percent, from 12.8 percent. Broken down, inbound tourism expenditure fell by roughly 78 percent to P132.58 billion, from P600.07 billion, while domestic spending dropped by over 82 percent to P556.89 billion, from P3.14 trillion.

The travel sector also endured an over 18-percent decline in number of workers to 4.68 million, from 5.72 million. Tourism’s share in the national labor force decreased to 11.9 percent, from 13.6 percent.

Just last week, the DOT announced that the Small Business (SB) Corp., tasked to manage the P6-billion credit facility for tourism borrowers, extended the grace period for paying loans to two years, from one year.

However, sectoral stakeholders, particularly MSMEs, find these changes too little to benefit them.

A travel agency president interviewed by The STAR said bookings have yet to recover in spite of the decision to ease travel restrictions. It remains uncertain if his firm can earn enough sales to repay the loan it secured from SB Corp.

On the other hand, industry leaders from the Tourism Congress of the Philippines (TCP) and the Philippine Hotel Owners Association (PHOA) welcomed the SB Corp.’s decision to prolong the deadline for borrowers to pay.

TCP president Jose Clemente III said the extension of the grace period may encourage tourism firms to avail of the loan, which they can deploy to prepare for the looming return of foreign travelers in the country.

PHOA president Arthur Lopez, for his part, asked the government to grant loans to large hotels as well, lamenting how banks are concentrating their lending on MSMEs during the pandemic.

Alejandra Clemente said the uncertainty experienced in the pandemic – exhibited by the several times that regions revert to lockdowns – makes it difficult for tourism firms to stabilize their operations and, in turn, earn revenue to comply with their obligations.

For her, the DOT should intervene in amending the guidelines applied by the SB Corp. to favor the interest of tourism stakeholders.