JAKARTA (TheInsiderStories) - Indonesia considered to open the country for travelers from China, South Korea, Japan and Australia to recover the economy, said government official on Friday (06/12). The country’ tourism sector faces potential losses of US$4 billion due to the drastic decline of foreign tourists to the country.
“We’re setting tourism corridor for four countries such as China, South Korea, Japan, and Australia,” said deputy at the coordinating ministry for maritime and investment affairs, Odo Manuhutu, in a video press conference.
But he does not give the time when will it be opened. He asserted, the tourism activities will be opened under tight health protocols. Beside, foreign tourists, senior minister for maritime and investment affairs, Luhut B. Pandjaitan was stated, there needs to be an effort to recover and improve the tourism sector, especially the contributions of domestic tourists to 70 percent of the total tourists.
“Indonesia itself is 54 - 56 percent supported by domestic tourists and the rest from abroad,” said the deputy.
Indonesia Hotel and Restaurant Association, Hariyadi B. Sukamdani said on March, tourism sector has losses at least $1.5 billion since January amid growing fears of the pandemic. Total estimated losses $1.1 billion occurred as a result of cancelations made by Chinese tourists and the remaining $400 million from other countries.
He noted, the fiscal stimulus has released by the government with total amount Rp10.3 trillion ($735.71 million) so far not give impact to these sector. In the latest report, Moody’s Investors Service rated coronavirus spread will significantly slow economic growth, which will in turn amplify its financial impact on several key corporate sectors, especially tourism.
While, IHS Markit expects, the aggregate dividend payouts from airlines in Asia Pacific (APAC) to drop 20.7 percent to $1.4 billion in 2020 from a year ago, amid stark earnings prospects over the short term.
“Sectors reliant on trade and the free movement of people are most exposed, such as passenger airlines, shipping, and lodging & leisure, which includes cruise lines and restaurants,” said Benjamin Nelson, a Moody’s VP in a written statement released on March 17.
Global automakers are also under great pressure because of their reliance on international supply chains, while gaming and non-food retail in certain regions are also exposed to supply chain disruptions, and the inevitable decline in foot traffic.
“Companies’ ability to withstand the effects of the virus will depend on its duration, and we caution that as events unfold very rapidly on a daily basis, our assessment of exposure will change over time,” adds by Richard Morawetz from Moody’s in the same report.
Moody’s assessment is based on its baseline scenario, which assumes a normalization of economic activity in the second half of the year, and the ability of some companies to withstand the effects of the virus will depend on its duration. Moody’s downside scenario factors in a jump in cases and public fear that the virus will not be contained in the first half of 2020, leading to extensive and prolonged travel restrictions and quarantines, along with a prolonged slump in commodity prices.
While, IHS Markit rated, airlines typically adhere to performance-linked dividend policies and they have been greatly hit by the COVID-19 outbreak. The plunge in dividend payouts is mostly attributed to two big players influencing the overall dividend trajectory.
Written by Staff Editor, Email: theinsiderstories@gmail.com
