The Cambodia Hotel Association (CHA) president claims that the hotel industry is seeking far and wide to secure financial assistance because of the Coronavirus pandemic, which hit hard the entire tourism sector.
Clais Chenda president of CHA told Khmer Times that COVID-19 has severely affected the hotel industry, the tourism sector’s biggest investment.
Chenda, who also runs her own hotels, said her businesses have been temporarily closed down because of the decline in tourism and is desperately seeking financial assistance. “I have applied for a loan from one commercial bank but so far it has been three weeks and I still have not got any response from them,” she said. “My team also contacted the SME Bank of Cambodia but they said loans for tourism-based businesses such as hotels are not available at this time.
“It means that they may not provide a loan for now, but I don’t know if they have changed the policy or not. I will keep up-to-date with them,” she said Chenda said the sector needs interest-free loans or at least low-interest rates without collateral from the government in order for hotels to survive.
“We cannot predict when COVID-19 will end and, if the crisis goes, the sector will still need a long time to return to normal because people need to save and they will not travel,” she said. “We are now struggling with cash flow or working capital as some hotels face cash drying up.”
Chenda said that it also needs an electricity tariff cut for the industry for a period of time during and after COVID-19 in order for the hotels to be able to cover their operations because it takes time to restore business.
“It is severely affecting business owners and staff because no visitors means no revenue and hotels are closing,” she said. “And for those who rent their building, they are the most affected because they still have to pay rental fees and staff wages.”
Tan Dexter, CEO of SME Bank of Cambodia, did not respond by deadline to an email sent to him by Khmer Times yesterday.
The government in April officially launched a $100 million government SME Co-Financing Scheme, which is expected to help lift local productions and supply domestic demands.
Under its terms, small and medium enterprises ( SMEs) can borrow up to $200,000 for working capital and up to $300,000 for investment capital with a maximum interest rate of 7 percent per year. The repayment period was extended to seven years.
Chenda said: “We would like to express our thanks to the government for establishing the SME Bank of Cambodia but the loan is not for all sectors.”
In its announcement on Tuesday, the Cambodian government introduced four measures to ensure social and economic stability, especially to ensure all businesses and trades keep going despite the health scare.
The government extended two months more a tax exemption from June to July for hotels, guesthouses, restaurants and tour operators. It also provided an exemption for tourism licence fees for 2021 and said they were not required to pay into National Social Security Fund during the crisis.