New measures help tourism industry cope with outbreak impact

Hu Min
The Shanghai Culture and Tourism Administration is offering deposit returns, rent breaks and other benefits to operators. Post-outbreak revitalization plans are also in the works.
Hu Min

The COVID-19 outbreak has delivered a huge blow to Shanghai's tourism industry, but new measures have been released to help businesses impacted by the epidemic, authorities announced on Thursday.

The average occupancy rate of nearly 8,000 hotels in the city was just 14 percent during the Spring Festival holiday, when booking fees on about 450,000 rooms were refunded, the Shanghai Culture and Tourism Administration said. Since February 1, occupancy rates have fallen further to only 6 percent.

About 45 percent of hotels across the city are closed or open only a limited number of floors to cut operating expenses, said Jin Lei, deputy director of the administration.

In January and February of 2019, turnover among the city's travel agencies was 17.9 billion yuan (US$2.56 billion) and 28 billion yuan respectively, according to Jin, who explained that tourism revenue during the same months this year will fall well short of these figures.

Shanghai has 1,782 tourist companies, and about 90 percent are small or medium-sized, according to Jin.

"At present, most small and medium-sized tourist companies in the city are facing difficulties in their cash flow, and 12 new measures aim to relieve their financial pressure," said Jin.

As part of industry relief measures, 80 percent of quality assurance deposits are being returned to travel agencies, the administration announced. The return is a temporary measure and the full deposit should be paid back to the authority before February 5, 2022.

It is estimated that more than 1,400 travel agencies in Shanghai will receive a total of 500 million yuan in refunded deposits, according to the administration.

The deposits are used to compensate tourists in disputes over contracts or situations such as a travel agency going bankrupt.

Shanghai's tourist companies are also being helped with tax breaks, rent reductions or exemption, loan interest discounts and training fee subsidies, the administration said.

Membership fees for the first half of 2020 will be exempted for members of the Shanghai Tourism Industry Association.

The application, review and delivery of specific funds to support projects which revitalize the city's tourism development will also be accelerated, the administration said.

Revitalization plans for the city's cultural and tourism market and policies spurring the consumption market will be implemented after the epidemic, according to the administration.

These will include conducting online and offline promotion activities, diversifying the city's cultural and tourism products, and accelerating the integration of cultural resources such as museums, art galleries, performances and intangible cultural heritage projects within the tourism industry.

They will target A-level tourist attractions, hotels, travel agencies, minsu (Chinese-style B&Bs), cruise operators and online travel operators in the city, and their validity period will be three months after the end of the pneumonia outbreak, according to the administration.

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