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The Resilience Budget - Easing the Cost Pressure on Hospitality & Tourism Sector


Ms Esther Ho, Director
School of Business Management

 

Tourism around the world is reeling. Marriott International CEO Arne Sorenson’s heartfelt address struck a chord in many of us when he shared about having to tell highly valued staff – the heart of his company – that their roles have been impacted by events that are completely out of their control.

Many businesses here are feeling the same way, and wondering how to keep afloat in this climate. The restrictions on travel and required social distancing is having an immediate impact, and these measures are not within our control.

STB previously said it anticipated a 25% to 30% drop in visitor arrivals – but this was before the extensive border controls and travel restrictions hit. Within the tourism community, we know that many are experiencing extreme drops in business, several of which have come to a standstill. We’re not only talking airlines, events, hotels, tour guides and cruises, but also the knock-on effects on our attractions, restaurants, shops and hawkers.

Post SARS in 2003, there was a V-shaped recovery for tourism as the pent-up demand was released. The current COVID-19 pandemic is nothing like what we have ever seen before. So, while we hesitate to make predictions, what gives us hope for a good recovery is the fact that Asia has a burgeoning middle class, and the wanderlust and demand for tours is strong – but pent up right now

 

If we are able to keep our eye on the future, then, right now it’s all about the cash flows needed to survive the downturn. The government stepped in a second time on 26 Mar with more help: The Resilience Budget has more than S$1 billion set aside for the hardest-hit sectors – aviation and tourism. As the current aviation hub for Asia, Singapore cannot afford to lose our position – hence, the S$350 million enhanced aviation support package was introduced to fund measures such as rebates on landing and parking charges and rental relief for airlines, ground handlers and cargo agents. When recovery starts to roll, Singapore has to be ready.

There is enhanced wage support, tax rebates, cash flow support, and crucially, funds for capability development. This is a clarion call for companies to take opportunity of lull: Review products, work processes, job- and service-redesign to achieve optimal results for your businesses. Do you need to train and upgrade your staff? Are they ready to mine data and see what products work best for your market? Are you already putting your inventory online?

 

Specifically for the tourism industry,

  • Income tax payments are deferred, government fees and charges frozen, and property tax rebate for 2020 increased (e.g. 100% for all hotels, serviced apartments, tourist attractions and 60% rebate for the integrated resorts).
  • The Training Industry Professionals in Tourism (TIP-iT) fund will be upped from the previous cap of 50% to 90% of training course fees and trainer fees. Funding for absentee payroll will be also be increased from S$4.50/hour to 90% of the worker’s hourly basic salary, capped at S$10/hour. SkillsFuture SG will work with training partners to ramp up capacity for courses in digital marketing and SkillsFuture for Digital Workplace programmes. Over S$5 million has been set aside for Workforce Singapore’s (WSG) effort in enhancing its Job Redesign Place-and-Train Programme for the Hotel Industry. WSG and Nanyang Polytechnic (NYP) have rolled out a new Digital Marketing Place-and-Train Programme, aimed to help MICE, Attractions and Tour & Travel (MAT) businesses adopt e-commerce and build up their digital presence for the longer term.1
  • Under the Enterprise Financing Scheme (EFS), the maximum quantum for SME working capital loan increased from S$0.6 million to S$1 million, and the temporary bridging loan programme, from S$1 million to S$5 million.
  • The funding period for reskilling of workers will be extended from three months to a maximum of six months. Retaining and retraining of workers are strongly encouraged so that the business can bounce back quickly once the situation improves. If laid-off workers move into other sectors, the manpower crunch will worsen post-pandemic.
  • To digitalise and improve productivity: The SME Go Digital Programme will be enhanced to bolster digital solutions, while the Productivity Solutions Grant and Enterprise Development Grant’s support level has been raised to 80% and 90% respectively.

There is support to help you navigate through all of this. You can consult the National Centre for Workplace Excellence (NACE), at nace@nyp.edu.sg, to get specific information about how to better improve processes within your company. NYP also stands ready to help. Contact our Centre for Industry & Lifelong Learning at nyp_cil3@nyp.edu.sg,and we can customise courses for you. Together, we can get through this, and get ready for the rebound and the future.

1 Concerted tripartite effort in line with the Stabilisation and Support Package to help tourism sector affected by COVID-19

2 Search for ETSP courses relevant to enhancing capabilities in tourism here.

Updated 17 July 2020

Published 31 March 2020