More than a thousand Hong Kong tourism workers may lose their incomes from December as government wage subsidies end.
Sunflower Travel said Wednesday it was asking 300 agency members to take unpaid leave between December and February due to its financial difficulties amid the pandemic. The company said if the border closure continued in February, the unpaid leave arrangement would be extended by three months.
Jason Wong, chairman of the Travel Industry Council, said more travel agencies would introduce similar cost-cutting measures this week.
Wong called on travel agencies to try their best to retain staff because tourism demand would rebound after “travel bubbles” with Singapore or the health-code system with the mainland were implemented.
Alice Chan, executive director of the Travel Industry Council, said 73 small and medium-sized travel agencies, each with four to 15 staff, had closed so far this year due to the Covid-19 epidemic.
Most tour guides in Hong Kong have taken unpaid leave since the Lunar New Year after travel between the city and the mainland dropped by 99% due to quarantine requirements.
The Hong Kong government then launched an employment support scheme in two tranches in which companies could be granted HK$7,500 (US$970) monthly per staff member between June and November.
As the epidemic situation improved in October, the government gave the green light to tour groups with up to 30 people last Friday and planned an “air travel bubble” with Singapore in November to allow people who tested negative for the virus to travel between the cities without being quarantined.
Another 1,000 workers in the tourism sector could lose their income from December 1 as another two or three big travel agencies might stop paying salaries while retaining their positions, Tong Kim-sang, who chairs the Travel Industry (Outbound) Tour Escort and Tour Guide Union, told RTHK.
Local tours could not save the travel industry because these could only generate HK$20 to HK$30 per head, which was not even enough to pay the guides, Tong said, adding that most travel agency workers would agree to keep their jobs without pay due to the worsening job market in the city.
Timothy Chui, a spokesman of the Hong Kong Tourism Association, said many tour agencies would not be able to survive from December 1. He said the cost to travel agencies for organizing local tours had increased because they needed to buy extra masks and hand sanitizer.
On Monday, several coaches staged a slow-drive protest from Golden Bauhinia Square in Wan Chai to the government’s headquarters in Tamar. The Hong Kong Travel Agent Owners Association said drivers of more than 1,000 coaches had been forced out of work since January. It urged the government to roll out compulsory testing for Covid-19 so travelers can be allowed to move around and cross the border.
Simon Lee, senior lecturer and co-director at CUHK Business School’s International Business and Chinese Enterprise Program, said the government should launch another tranche of employment support to avoid a sharp rise in unemployment.
On September 25, Chief Secretary Matthew Cheung said the government did not yet have a plan to launch the third tranche of the scheme. He said a total of HK$4.5 billion would be delivered to companies in different sectors, including tourism, aviation, transport and catering.
On October 20, the government said the unemployment rate had risen to 6.4%, the highest in about 16 years, between July and September, compared with 6.1% between June and August.
On October 21, Cathay Pacific announced that it was laying off 6,000 workers and would scrap its 36-year-old Cathay Dragon sister airline brand as Hong Kong’s aviation sector was seriously hit by the pandemic.
Felix Yip, associate director of the Centre for Human Resources Strategy and Development at Baptist University, said the unemployment rate would surge past 8% by the end of the year. Mass layoffs at Cathay Pacific were just the tip of the iceberg while more companies would follow suit and make staff redundant.
“Hong Kong is an export city so we have a very close contact with other countries particularly the United States and Europe. If they cannot improve themselves, I doubt if the economy of Hong Kong can improve,” he said.
A survey conducted by the university between July and September showed that 30% of the interviewed firms had already cut staff, he added.
Over the past two weeks, several local infections were recorded in Hong Kong, making Beijing unwilling to allow the territory’s people to go north without being quarantined.
Jeffrey Lam, a lawmaker of the Business and Professionals Alliance, said Hong Kong would probably have to wait until April before no local cases were reported for 14 straight days. He said he hoped Chief Executive Carrie Lam, who would visit Beijing next week, could lobby the central government to let some Hongkongers visit the mainland without the 14-day quarantine.