Formosa International Hotels Corp (晶華國際酒店集團) yesterday pressed the government to reinstall a wage subsidy for the hospitality industry, which has seen business slump by 50 percent amid spreading COVID-19 infections.
The industry could fare even worse as more Taiwanese vacation abroad following shortened quarantine periods, which would nevertheless continue to keep foreign tourists away, Formosa International Hotels chairman Steven Pan (潘思亮) told a shareholders’ meeting.
“The industry is in need of quick relief, instead of stimulus measures slated for next month,” Pan said, questioning the wisdom of the government’s plan to spend NT$5.5 billion (US$185.14 million) shoring up domestic travel, starting on July 15.
Issuing the travel subsidy of NT$1,300 per person for hotel accommodation is like prescribing flu medicine to critically ill patients, Pan said.
There is no need to motivate domestic tourists in the summer, the high season for travel, he said.
A wage subsidy would lend badly needed support to the hospitality industry, because few hotels could survive a 50 percent plunge in revenue for long, which explains why some players have already bowed out of the market, Pan said.
He voiced concern that more would follow as long as the government keeps border controls and quarantine requirements in place.
The government provided an immediate wage subsidy for hard-hit sectors in 2020 and last year, but kept quiet this time as occupancy rates at Taipei-based hotels tumbled to 25 percent amid spiking virus infections, Pan said.
Occupancy rates could drop further across Taiwan, as local tourists would prefer foreign trips now that the government has cut the quarantine period from two weeks to one week, effective today. People who test negative may return to work from the fourth day.
The eased requirement would end a boom on domestic tourism while lingering border controls and quarantines continue to keep foreign tourists away, Pan said, urging policymakers to take action to ward off such a scenario.
The government should revive a visa-waiver program for business visitors to help the industry and make Taiwan friendlier for businesses without adding to costs, Pan said, adding that the program was suspended due to the COVID-19 pandemic.
The quarantine and visa requirements would make Taiwan less competitive than neighboring countries in linking up with the world, Pan said.
Pan further questioned the need for Taiwan’s central bank to raise interest rates tomorrow, as inflationary pressures in Taiwan are not serious.
Monetary policymakers in the US and Europe have to hike interest rates to curb inflation induced by excessive money printing during the pandemic, Pan said, adding that Taiwan did not make that mistake.
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