Dhaka: "Travel trade is considered a tertiary sector. Meaning the growth of this particular sector relies on the growth of other sectors of a country. And since almost all sectors of Bangladesh will be knee-deep in crisis following the coronavirus pandemic, a domino effect will be further witnessed in the travel industry in the aftermath of the outbreak."
Dr Khondaker Golam Moazzem, Research Director, Centre for Policy Dialogue (CPD) said this on April 16 during the first session of the weeklong video conference titled PATA Talk During Lockdown organised by Pacific Asia Travel Association Bangladesh Chapter.
The purpose of the video conference to be held till everyday till April 22 is to come up with findings through discussion between the industry stakeholders and concerned government officials which will be later compiled and proposed as recommendations to the ministry to overcome the unfortunate crisis caused by the coronavirus pandemic.
"In the fiscal year 2020-2021, it is estimated that the sectors in Bangladesh involving trade with foreign countries such as import-export, employment abroad and remittance will go through tough times in post COVID-19 era. Because the countries Bangladesh exports to such as the USA, Germany, France, Italy, the UK and Spain are most affected by the coronavirus. Middle East does not show much promise either," Moazzem added.
Therefore, a subsequent impact of the worsening circumstances of these sectors will be witnessed in the country's travel trade which these have direct relations to.
Tourism opportunities with the US, Europe and Middle East countries will also be a challenge, he said.
Remittance based tourism such as Hajj and Umrah will also be hampered in the coming days due to the coronavirus pandemic.
There may also be limitations regarding foreign investment in the country. Foreigners might look away. Also if the government halts financing foreign projects, specially infrastructure related where many foreigners come and work in, that will affect the tourism and hospitality industry of Bangladesh too, Moazzem further stated.
On a positive note, Moazzem mentioned travel to and from China, India and other countries in Asia have a good chance to come back to normal. Therefore, there will be a need to utilise these markets for tourism as long term recovery measures.
Domestic tourism should also be key focus for a long time from July to December or onward.
However, as people's disposable income will hit a down curve for a certain time because of the injured economy in the aftermath of COVID-19, people will naturally refrain from non-essential or leisure travel. So tour operators in this regard can offer discounts or attractive packages to facilitate them to travel.
On the other hand, the agriculture sector is mobile. So tourism and cargo operations related to agriculture products with China and India will have to be properly utilised in the coming days.
In the SME sector, China based import will resume. This too has to be utilised from tourism perspective.
Nevertheless, industry stakeholders should prepare themselves to make the most of the next tourism season from October till April next year as soon as the health risk is gone, the researcher claimed.
On immediate measures, Moazzem urged to seek support from the government to clear salaries of the industry employees and workers.
Those who are in no formal contract, can be included in the BDT 760 crore stimulus package of the government, he suggested.
Secondly, Moazzem stressed that those who are in formal contract can be brought under the BDT 30,000 crore government package of working capital as these have separate allocation for the tourism industry. Companies can also opt for the soft loans with 4 per cent interest.
Regarding short term measures till June, CPD has already sent a proposal to the ministry which include recommendations to waive taxes. It also includes vat waiver from January till June next year. The government has also been requested by CPD to offer deferred payment facility for advance quarterly income tax.
"If they do not want to waive tax, they have been asked to at least adjust the amount of loss with tax payments made in the past," Moazzem said.
CPD also suggested to change the tax exempt limit from BDT 2.20 lac to BDT 3.5 lac. The centre also urged to decrease tax slabs from 10, 15 and 20 per cent to 5, 10 and 15 per cent respectively.
Lastly, since corona has seeded a fear among people that will remain for a long time, ensuring health security in travel should be a priority. "Industry stakeholders should also highlight that maximum health security is ensured for travellers in their promotional activities," Moazzem concluded.