As the COVID-19 pandemic continues to take a heavy toll on the tourism sector worldwide, Guyana is likely to lose $100 billion this year as a result of lost export earnings and the impact of the virus on the tourism sector as a whole.
The Guyana Tourism Authority (GTA) gave the stark projections on Monday while reporting that by April 2020, the tourism sector had already lost an estimated 46 per cent of its total revenue over a six-month period in contrast to the revenue earned for the same period in 2019.
The tourism association has since reached out to Central Government for low-cost financial support and supplemental financing options.
According to the local tourism body, based on current projections, this could lead to 50 per cent of tourism businesses closing their doors permanently if no financial support is put in place.
It said that in terms of jobs, an estimated 30 per cent of those employed in Guyana’s tourism sector have lost their jobs and an additional 36 per cent had been furloughed or placed on unpaid leave.
Based on the sector analysis undertaken by the GTA, the body said that loss in direct expenditures within Guyana’s economy is estimated to be a minimum of $32.8 billion in 2020 in export earnings.
According to the GTA, 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 $98.4 billion in losses in 2020.
This excludes travel-related taxes from international arrivals and departures such as travel and departure taxes, among others.
According to the tourism body, based on the social and economic implications of this economic shock, it “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.”
Among the measures being called for is the waiver of payments on Value Added Tax (VAT), Pay As You Earn (PAYE), National Insurance Scheme 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.”
Additionally, the organisation is calling on Central Government to provide a VAT exemption and to 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.
The semi-autonomous governmental organisation, in its petition, is also calling for 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 $10 million a year and who are at risk for facing severe economic hardships.
The body has also proposed the reopening of 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.
According to the GTA, “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.”