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.
“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.