Tourism Economic Stimulus Packages as a Response to COVID-19

Abstract

Economic stimulus packages in times of global crises and pandemics are nothing new. Following the 2008 global financial meltdown, many countries announced fiscal interventions to stimulate their economies. Before the COVID-19 pandemic, global tourism has never been in need of a bailout. However, due to the pandemic, hotel occupation and restaurant visits plummeted, and some airlines and related businesses were liquidated. By means of secondary data and public pronouncements, as well as document and critical discourse analysis, the chapter profiles stimulus packages to save the tourism industry. From small island developing states (SIDS) in the Pacific and the Caribbean to major global economies and in countless African countries, COVID-19 devastated the tourism sector. The findings are that stimulus packages included measures such as the postponement and restructuring of tourism business loan payments; the postponement of tourism surcharges, levies and taxes; delayed tax declarations and deductions for the sector; the introduction of special tourism sector loans and credit lines; exemption from utility payments and delayed tax collection; cuts and subsidies in interest rates and guarantees on loans for small, medium and microenterprises; the marketing of domestic tourism and discounts on air tickets and jet fuel. The most popular stimulus packages were income tax and corporate tax deferrals. The chapter recommends that wealthier countries, development banks and donors urgently consider topping up fiscal packages for SIDS and least developed countries because the demands occasioned by COVID-19 are bigger than domestic resources (if there are any). It also argues for the escalation of national stimulus packages already in place and quick peer learning and assistance across the world. Since some major companies are able to remain afloat, corporations who are to be bailed out with taxpayers' money have to be selected carefully.

Government commitment to tourism and hospitality sector during COVID-19 pandemic

“…The major discoveries from the news article sources indicated supportive measures such as stimulus packages in the forms of tax breaks and debt services and certification to ensure tourists that the local business is following the sanitary protocols. This finding is in agreement with the previous study that policies related to tax breaks and subsidies are appropriate in handling crises (Blake and Sinclair, 2003;de Sausmarez, 2004;Nhamo et al, 2020). The findings of this study hold that stimulus packages and tax breaks geared toward supporting the local business demonstrate dedication toward the tourism and hospitality sector by the Government of Uzbekistan.…”

“…For instance, because of pandemic and restrictions on movement, consumer-buying behavior changed dramatically, causing a 69% drop in purchase of non-essential items in Sub-Saharan Africa (GeoPoll, 2020). As a result, a plethora of tourism-related businesses such as hotels, restaurants and airlines witnessed lower demand by tourists (Nhamo et al, 2020). World Travel and Tourism Council strongly encourages governments to formulate policies and programs to provide necessary support for the struggling tourism and hospitality sector by protecting the livelihood of the workers involved in this industry as well as laying out financial stimulus for the companies and businesses affected by this crisis (WTTC, 2020a(WTTC, , 2020b.…”

Insentif Pajak Dalam Merespons Dampak Pandemi Covid-19 Pada Sektor Pariwisata

“…Penelitian yang dilakukan Nhamo et al (2020) untuk sektor pariwisata secara global menghasilkan beberapa kesimpulan salah satunya adalah negara Asia harus mengurangi ketergantungan pada wisatawan Cina. Dalam penelitian ini akan dibahas bagaimana insentif pajak dapat merespons permasalahan dan langkah apa saja yang dapat diambil oleh pemerintah.…”

COVID-19 Pandemic: Impacts, Craftsmen’s Living Strategies, and Economic Recovery of Bamboo Handicraft Enterprise in Gunungkidul, Indonesia

“…hotels, restaurants, transportation, aviation services, and MSME (Bayu, 2020). The decline in the number of tourists and a corresponding decline in retail souvenir sales occurred during this pandemic (Nhamo et al, 2020). The tourism sector has a multiplier effect on the Indonesian economy (Cushnahan, 2004;Kartiko, 2020) and COVID-19 had prolonged effects on the tourism sector in Asian countries (Cahyadi & Newsome, 2021;Jaisingh, 2021;Noorashid & Chin, 2021).…”