Bhutanese travel companies paying employees despite loss

Amid the indefinite Covid-19-induced tourist ban in the country, many tour operators have kept their employees on the regular pay roll in a show of solidarity

Apr 07, 2020
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Thimphu: Amid the indefinite Covid-19-induced tourist ban in the country, many tour operators have kept their employees on the regular pay roll in a show of solidarity.

Incomes from tourism have been negative for a month now. But tour companies are using either cash in hand or incomes from other sources to pay their staff.

One of the biggest tour companies in the country, Yangphel Adventure Travel, has been using cash in hand to pay the employees, according to its chief executive officer (CEO), Karma Lotey.

He said that the company’s 270 employees, including that of its hotels, Zhiwaling, are on paid leave. But he added that it would not be sustainable to keep them on the regular payroll beyond six months.

Karma Lotey said that company was working out a win-win arrangement with banks. The company has proposed to banks for re-structuring of loans, enhancing working capital and deferment of interest payments to retain employees.

“Of course, if there is some fiscal incentives, there is nothing like it. But we don’t want to burden the government at this difficult time,” he added.

Most other tour operators are doing the same.  

Owner of Bhutan Birding and Heritage Travels, Hishey Tshering, said that he had committed to his staff members that he would continue to pay them despite the loss of income from tourism. He has about 12 full-time people, including some from his hotel, on the regular payroll.

“If I reach a situation where I can’t pay anymore, then I will have to see which of the staff members are in more dire need,” he said.

If the situation prolongs but things return to normalcy after a year, Hishey Tshering said that he would pay the employees in arrears. He was in favour of submitting a letter of commitment saying that tour operators would pay their employees as a part of support to the government.

“The biggest help the government can give can be freezing of monthly loan installments or even the interest part until the situation improves,” he said on what kind support would be useful.

Another tour operator, Sonam Jamtsho, said that he was using savings and incomes from his construction company to pay his employees.

But the owner of A Bucket List Adventure added that even construction companies have been affected due to the Covid-19 pandemic. “Even if we get work, workers are not available,” he said.

Little or no options for small and new entrants

While the older players are making adjustments, small tour operators and new entrants’ anxious wait for relief programmes continues.

The delay in relief programmes has forced some of the tour operators to send their employees on unpaid leave although the government has requested them not to do so. But the tour operators say that the government has been agonizingly late.

Economic relief programmes should have come more than a week ago, if the government’s earlier statements were anything to go by. The government later said that it needed to incorporate some amendments into the relief programmes.

Small and new tour operators say they need help such as soft loans for payment of office and house rents and to cope with loss of livelihoods immediately. For small and new operators, tourism had been the sole means of living.

A tour operator said, “Generally, all small travel operators like me depend on regional tourists. He said that it was the small operators that needed a relief immediately.

He said banks should give soft loans for sustenance of livelihood until business returns to normalcy.

He said his monthly expenses including office and house rents were about Nu 50,000 and that all of them came from tourism. “I’m totally bankrupt and am going through a critical situation,” he said.

Executive director of Association of Bhutanese Tour Operators (ABTO), Sonam Dorji, said that despite the total loss of income, most tour operators had expressed commitments to continue paying their employees for some months.

Some employers, he said, were paying 50 percent of the salary. The ABTO, he said, had come up with strategy to engage the employees in alternative economic activities and in skills development trainings.

One of the alternatives considered is to engage people in development of tourism infrastructure. He said he was hopeful that deferment of loan installments would come in the government’s economic stimulus plan.

The government has said that the economic relief programmes would be rolled out in phases, the first of which will be targeted at the most affected sector.

Among other recommendations, ABTO recently requested the government to provide capital loans to be made available at a zero or very minimal interest rate and repayment to be done over a period of four years.

The ABTO solicits soft loans for marketing, product development and staff retention after lifting of travel restriction.

Prime Minister Dr Lotay Tshering at the recent meet the press asked affected businesses not to send their employers on unpaid leave. He said that the government had already started bearing some portion of affected employees’ salaries.

But Kuensel found that many affected employees were either engaged in temporary jobs or have returned to their villages as the employers stopped paying them.

To enable businesses to avail loans and maintain continuity of economic activities, the government plans to inject liquidity into financial institutions.

Financial institutions expressed their willingness to help clients by deferring equated monthly installments (EMIs), providing moratorium and increasing grace period on loans for eligible individuals and businesses.

However, whether or not banks will give soft loans, tour operators will have to wait for the government’s economic stimulus plan.


https://kuenselonline.com/travel-companies-paying-employees-despite-loss/

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