Covid-19 leaves stricken travel companies relying on government subsidies, savings to get by.
-19 pandemic, which has halted international trips, took its toll on 71 Hong Kong travel agents this year, but the industry regulator has warned that the worst is yet to come.
“The outlook is most gloomy for travel agents,” said Alice Chan Cheung Lok-yee, executive director of the Travel Industry Council, which issues licences to agents. “Who can survive a zero-income situation for such a long period?”
The companies closing between January and the middle of last month joined about 100 which shut down last year, after tourism took a hit from months of anti-government protests in the city.
Chan told the Post that there were 1,723 travel agents still in business at the middle of September, compared to about 1,900 at the start of last year. “We expect more close down towards the end of the year,” she said.
This was because the government has said its HK$81 billion wage subsidy scheme meant to preserve jobs would not be extended beyond September.
“Many travel agents have been surviving on the subsidy, their own savings and even from selling their properties,” Chan said.
Each travel agent who qualified received HK$80,000 through the government’s anti-pandemic subsidy.
-19 crisis has wreaked havoc on tourism since February. All but three of Hong Kong’s border checkpoints have closed, with no indication of when they will reopen.
The number of visitors dried up as all but essential workers from mainland China, Macau and Taiwan are required to spend 14 days in compulsory quarantine in a hotel or at home.
Non-Hong Kong residents arriving by plane are denied entry in most circumstances.
As a result, visitor arrivals dived 99.9 per cent to fewer than 4,500 people in August and 92 per cent to 3.54 million in the first eight months of the year, compared with the same period last year.
Chan said tour agents had been hit by cash-flow problems. Those depending on inbound travellers have been crippled since the second half of last year, when the social unrest put off mainlanders from coming.
Travel agents relying mainly on outbound business have seen their tours cancelled through most of this year because of the pandemic.
More woes have surfaced recently for some companies.
Sun Flower, one of the city’s biggest tour agents which has been in business for 46 years and has about 10 branches, was sued on September 28 by a supplier for HK$3.27 million in unpaid fees.
The plaintiff, a South Korean company offering travel services for visitors including from Hong Kong, claims it has not been paid for services provided between last November and February this year.
In a statement, Sun Flower said it hoped to settle the dispute and carry on despite the unprecedented challenges brought on by the pandemic.
Also on September 28, Eastrip Travel and Wee Travel were the subject of separate wind-up petitions by Creditor Bank of East Asia. Eastrip went bust in April, reportedly affecting about 360 customers who had paid HK$5 million for air tickets and tour packages.
Wee Travel’s licence was cancelled in March when it folded, affecting about 1,000 travellers and involving about HK$6 million worth of tickets and tours.
Freddy Yip Hing-ning, president of the Hong Kong Travel Agent Owners Association, urged the government to relax social-distancing rules so that travel agents could resume tours for local groups.
The current rule restricting public gatherings to no more than four people should be relaxed to allow group outings of 30, he said.
Yip, who runs 31-year-old Goldjoy Holidays, said the tours for locals would “at least throw a lifeline to the dying industry”.