Kuwait Times, Tuesday, Nov 17, 2020 | Rabi Al Thani 2, 1442
Kuwait’s travel industry still stuck in doldrums
Kuwait:
Businesses in Kuwait are limping back to normal after an eight-month-long
painful hiatus, but one industry in the country still remains deeply stuck in
the doldrums. Kuwait’s travel and tourism sector continues to reel from the
coronavirus restrictions, enduring the trauma of hefty financial losses, layoffs
and closure of branches as Kuwait has kept its airspace closed to airlines
flying to and from several crucial destinations amid the resurgence of the
pandemic.
While many travel agencies and tour operators were forced to shutter some of
their branches and services, some resorted to layoffs to stay afloat in the face
of a severe downturn. “The pandemic has inflicted debilitating damage on the
travel industry in Kuwait. We lost about 70 percent of our business over the
last seven months.
The unprecedented crisis forced us to lay off 50 of our staff out of the total
workforce of 450. It was a very painful decision, but we were left with no other
option. Without any bookings or business, it is impossible for travel agencies
to pay their staff, settle rents and run their business,” said P N J Kumar,
Chief Executive Officer at Caesars Travel Group.
Kumar’s words underscored the magnitude of the crisis the travel industry is
enduring in Kuwait in the aftermath of the coronavirus. Around 340 travel
agencies had been operating in Kuwait prior to the outbreak of the pandemic, but
as the situation became worse, some had to close a number of their branches.
Pay cuts, layoffs
“In March, in the early days of coronavirus, my company told us to take a 50
percent pay cut. But later in July, the company terminated my services along
with 19 of my colleagues,” said Ashraf Ali, an executive who worked at a leading
travel agency. “It was a huge shock for me. My wife is a homemaker without any
job. With two young children to take care of, it was nearly impossible for me to
make ends meet. Luckily, I got a job in another travel agency last month even
though my salary is much less than what I was paid in my previous job. And the
new branch is yet to open,” he said.
Kuwait has allowed some airlines from select countries to operate flights to and
from Kuwait airport, but flights from 34 countries are not permitted to fly
directly into the country, significantly impacting the revenues of the local
travel sector. The executive committee of Kuwait International Airport’s
international affairs is reported to have submitted a proposal to the government
on a mechanism for allowing entry of people directly from the 34 banned
countries. No decision has been taken yet on the matter, but the industry
expects a favorable decision by the authorities soon.
“In fact, many passengers from India cancelled their bookings via Dubai hoping
that Kuwait would lift the ban on flights from 34 countries and they can fly in
directly. As a result, exorbitant UAE-Kuwait airfares have also come down.
However, their expectations were short-lived and the ban continues to remain in
force,” said P N Kumar, General Manager at Badur Travels, Kuwait.
While demanding a review of this decision, the local travel and tourism industry
projected that the country has lost more than KD 1 million by restricting the
entry of expats from these 34 countries. Although Kuwait’s aviation industry
pared some losses after airports in the UAE became transit hubs for passengers
bound for Kuwait and tour operators began to manage to get some clients,
revenues remained way behind pre-lockdown levels.
Industry experts point out that the authorities could have allowed flights from
these countries, in compliance with COVID-19 regulations, so that the local
travel and hospitality industry would have benefited. “In fact, Kuwait’s
decision is indirectly helping UAE carriers, its hotels and its travel industry.
A direct flight to Kuwait will not only help the local travel sector, but
inbound passengers as well,” said Roy Mathews, an Indian travel executive.
Tour operators attached to travel agencies in the country bore the brunt of the
crisis, forcing many of the firms to shed jobs as leisure travel and foreign
visits to and from the country came to a grinding halt since the coronavirus
outbreak in February this year. Countrywide, nearly 30 percent of jobs in the
travel industry were lost following the crisis, although some of them found jobs
in other companies, at least temporarily, according to industry officials who
spoke to Kuwait Times.
Arab Organization for Tourism and the Arab Air Transport Association had
forecast that the number of air travelers to and from Kuwait will dramatically
drop by about five million during 2020 compared to 2019. Kuwait Airways laid off
as many as 1,500 expat employees while Jazeera Airways laid off around 500
employees as the pandemic continued to pummel demand for air travel.
Hospitality sector
“Kuwait’s hospitality industry has been one of the worst affected,” said Anwar
Ibrahim, an executive with a five-star hotel in downtown Kuwait. “Practically,
there aren’t any international guests travelling to Kuwait these days unless
there is an emergency,” he said. If the country’s airspace reopens for foreign
airlines and passengers, things could improve at least marginally,” he added.
According to Ibrahim, occupancy rate in most of the hotels in the country has
hit rock bottom, making it difficult for the industry to operate under the
circumstances. The loss of visitors is also being felt in every segment of the
economy – from restaurants and retail outlets to malls, transportation services,
beauty salons and gyms. “We earnestly hope that the situation will improve and
the authorities will lift the ban on airlines from the 34 countries sooner than
later,” said Mathews.
Upon resumption of commercial flights on August 1, Kuwait announced a list of
countries where flights to and from are suspended until further notice. The list
currently includes Afghanistan, Argentina, Armenia, Bangladesh, Brazil, Bosnia
and Herzegovina, Chile, China, Colombia, Dominican Republic, Egypt, France, Hong
Kong, India, Indonesia, Iran, Iraq, Italy, Kosovo, Lebanon, Mexico, Moldova,
Montenegro, Nepal, Northern Macedonia, Panama, Pakistan, Peru, the Philippines,
Serbia, Spain, Sri Lanka, Syria and Yemen.