Even with more than NT$450 billion (US$14.85 billion) in financial aid from the Executive Yuan’s expanded relief package, local tourism-related businesses are unlikely to rebound from the COVID-19 pandemic any time soon, a central bank report released last month said.
The NT$1.05 trillion relief package includes NT$472 billion in financial assistance for tourism and transportation sectors, such as airlines, hotels, travel agencies, taxis and tour buses.
However, a March 20 central bank report said that the effects of the COVID-19 pandemic on global and domestic economies are far greater than that of the 2002-2003 SARS epidemic, despite any benefits from delayed purchases after the crisis ends.
Photo: CNA
Tourism-related industries would be hardest hit, with widespread travel restrictions and bans on mass gatherings imposed by governments worldwide.
“It is difficult to say that there will be a V-shaped recovery at the moment, as it all depends on the development of the pandemic,” the report said.
Taking the SARS epidemic that broke out in late 2002 as an example, the bank said that the local economy rapidly lost momentum in the second quarter of 2003 after the disease took its toll on global activity.
Over that three-month period, travel on international flights to and from Taiwan fell 69.5 percent and the nation’s economy contracted 1.15 percent in 2003 as a result of the knock-on effects of SARS, the bank said, adding that the effects of COVID-19 are more severe.
Passenger load factors in February on routes between Taiwan and China, Hong Kong and Macau fell by more than 90 percent, compared with their levels in December last year, the report said, citing Tourism Bureau statistics.
At the same time, taxi drivers had 30 percent fewer passengers, while tour bus operators also experienced a 17.2 percent decline in daily operations from January, the report said.
The central bank said that the restaurant and beverage sector typically has the highest GDP ratio from the tourism industry, while tour agencies, hotels, and car rental and air transportation companies also earn a noticeable portion of their incomes from it.
Therefore, as domestic and foreign tourists’ travel activities stagnate in Taiwan, tourism-related businesses would face greater difficulties, the bank said.
Due to Taiwanese’s strong interest in traveling abroad, coupled with Beijing’s ban on independent tourists to Taiwan from Aug. 1 last year, Taiwan registered travel deficits of US$6.1 billion last year, a new high, central bank data showed.
However, the travel deficits would likely shrink this year, because of COVID-19, the bank said.
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