The nation's tourism-related businesses are urging the government to help them secure bank loans to survive the financial burden posed by the outbreak of severe acute respiratory syndrome (SARS). But the cash-strapped government appears in poor shape to help.
The Executive Yuan yesterday announced NT$10 billion in government-backed credit-guaranteed loans to small and medium-sized enterprises, after Premier Yu Shyi-kun met with six major industrial and trade groups yesterday afternoon.
Last week the legislature also approved a NT$50 billion bill to help combat the spread of SARS, with two-thirds of the money set aside for industries affected by the outbreak.
Details of the credit-guaranteed loans plan will be released today, according to Ho Mei-yueh (
But businesses are saying the amount is too small to help them survive the financial squeeze.
Travel industry officials said that the loan is to small to help much.
"NT$15 million may run out within a few days for travel agencies with as few as 50 staff," said Tseng Sheng-hai (曾盛海), chairman of the Taipei Association of Travel Agents (TATA, 台北旅行公會).
Acknowledging the government's financial difficulties, Tseng expressed his gratitude to the government for its relief measures, which he said "are better than nothing."
But Tseng urged the government to cut the value-added tax (VAT) from the current 5 percent to 2 percent for a period of two years.
The nation's hoteliers are also feeling the pain, said Stanley Yen (嚴長壽), chairman of the Taiwan Visitors Association (台灣觀光協會) and president of the five-star Landis Hotel (亞都麗緻).
Yen yesterday applauded the government for lending a hand to the industry.
"The NT$15 million loan will definitely help meet an urgent need [for cash], although some hoteliers are losing over NT$10 million a month," Yen said.
"The disease has been the most devastating [event for the nation's tourism-related industries] in the past 10 years," Yen said, "and we don't know when it will come to an end."
He urged the industry to brace for at least a six-month downturn. But he further expressed doubt about the effectiveness of the emerging cut-throat price competition among five-star hoteliers, saying that such three-star rates could only cover hotels' employees salaries and basic costs.
"Smaller hotels are suffering even worse from the price competition since their patronage is mostly being stolen by discounted five-star hotels," Yen said.