SARS: Tourism Industry Veterans Speak Out

One Tuesday morning in early June, if you walked into the office of the Taipei Travel Labor Union on Linsen North Road, you would find everyone in flux as secretary general Ma Chau leads six or seven standing committee and board members in folding notification letters destined for union members. In the past at this time of the year, their hands would already be sore from answering incoming calls to make reservations for summer tour groups. But today the ambience is inexpressibly depressed, and as of noon, not one mobile phone has rung.

With air transportation temporarily crippled, businesses have relied on sea transportation to prevent SARS from isolating Taiwan economically. A slight rise in exports during the month of May shows that the Taiwanese economy is well on the way to recovery.

Riding out the drought

"Thank goodness for this place where everyone can gather together, eat a free boxed lunch and pass the time," says supervisor Hsu Lien-hsiang, who has worked in the travel industry for more than a decade. Over the last few months, clients have become a scarce species and Taiwan's estimated 50-60,000 tourism professionals-including those in sales and ticketing, as well as guides and tour group leaders-have been living off their savings. Many, including some of those sitting in the office that day, have been unable to get by in this way, so they have left the industry. Some work part-time at McDonald's, while others work temporarily as building security guards in order to feed their families. Worse, there are rumors that some have even descended to prostitution to make a living.

"It can't be helped. Just filling your belly has become a problem for everybody!" Ma Chau holds a freshly drafted petition requesting that the government make an interest-free loan of NT$180,000 to each travel agency staff member (based on a standard household monthly minimum wage of NT$30,000 for a six-month period). The loan would be repayable over 20 years at a rate of about NT$700 monthly, and would not require a guarantor.

In theory, the government does not lack the means to offer relief. Since travel agencies are now widely unable to pay salaries, for an attractive solution is to allow employees to take "unpaid leave." But once an employee has been laid off, he risks being unable to continue to receive health and labor insurance. Therefore the Executive Yuan has already approved that the head of each travel agency may apply for a loan, equivalent to three months' "salary" (based on the quoted salary for labor insurance purposes), to be distributed to each employee.

But, as Ma Chau hurries to explain, "In order to avoid the burden of insurance premiums, travel agencies all insure their employees based on the lowest salary base permissible. If you are insured for a salary of NT$15,000, then a three-month payment would not even reach NT$50,000. How can you get by on that?" What's worse, many of the union's members are "one-man bands" who personally recruit customers and then pass them along to the larger agencies that run tour groups. So where is the "boss" who will apply such insurance-related loans?

Conscientiously washing hands, wearing gauze masks, and taking one's temperature in public and private locales is the best way to prevent the virus from spreading.

Total recovery for the industry?

As if just earning a living weren't hard enough, even worse is the fact that the imminent summer season looks set to be a disappointment, so the second half of the year will clearly not be a comfortable one.

In the past, customers traveling abroad in the summer would have begun asking about itineraries, signing up and making reservations more than a month beforehand, so by the end of June travel agents would already have received a big amount of revenues for tour travel. But now locals are unwilling to go abroad as popular destinations refuse to admit Taiwanese tourists, even though the World Health Organization was set to remove Taiwan from the list of countries to which travel is not advisable on June 17. Apparently, this development came too late.

"Anyway, tour guides and sales staff have temporarily switched jobs or simply left the industry, so there are no longer enough staff available to serve the customers," says Ma Chau. "And besides, airlines have already cancelled many flights, and starting them up again will also be very difficult." With recent news reports noting that Thailand's Phuket and Indonesia's Bali are filled to the hilt with tour groups, while discount airplane tickets for the US and Europe are in short supply, it would appear that the market has blossomed again. But Ma Chau wonders: "Are things really that optimistic? Why is it that we travel industry professionals haven't been touched by this sense of excitement? There is clearly a gap between appearances and reality!"

Furthermore, as airlines, hotels, travel agencies, shopping malls and amusement parks have rushed to launch "below cost" itineraries with slogans such as "One-day Tour for NT$499" and "Food and Lodging all for NT$999," they have become a popular topic which also leaves travel industry veterans troubled.

"These are emergency measures which can't go on indefinitely. Partly because they will spoil the consumer, and partly because they will destroy order in the industry." Ma Chau points out that profit margins in the travel industry were already very slim, and it cannot withstand further bodyblows.

For example, Ma Chau says that a travel agency's ticketing agent can only earn a tiny profit of NT$50-200 from the sale of an airplane ticket, and now the agent must compete with web sites. Many self-employed drivers themselves have borrowed money to buy tour buses. They have no salary, and depend entirely upon a commission of NT$300-500 from each stop where their passengers purchase goods. Now tourism in Taiwan by locals is at a low ebb, and foreign tourists-particularly the Japanese, scared off by an incident in which a doctor from Taipei's Mackay Memorial Hospital developed SARS while visiting Japan. As a result, many drivers can't pay back their loans, and banks are repossessing their vehicles. Even the government's issuance of "emergency gas ration tickets"-worth NT$30,000-has proven ineffective, and drivers are in a grim state.

Through thick and thin

Of course, says Ma Chau frankly, the current difficulties facing the travel industry cannot entirely be put down to SARS. Three or four years ago, the industry was already in an awkward state of dangerously low revenues. "The boss has vanished!" has become a familiar joke among industry stalwarts. Not only small- and mid-size travel agencies have been teetering on the brink of bankruptcy-even among the big tourist hotels some 70% have long been barely profitable, and "delayed" payment of staff salaries is commonplace.

Hotel industry veteran Chang Hai-lung (not his real name), who has been friends with Ma Chau for many years, is an example. Approaching 50 and with two daughters still in middle school, in April this year he finally got his three-month severance pay and left the five-star vacation resort in the mountains of southern Taiwan where he had worked more than two years.

One reason he chose to leave, recounts Chang Hai-lung, is because his boss had long ago stopped paying his salary; Chang was even paying the water and electricity bills for the resort's Taipei office. Another reason is that a friend in Guangdong, China, had opened a tourist hotel with an orchard, and asked him to help out. "I never could have imagined that due to SARS, I would lose my job and not have the nerve to go to Guangdong either. I caught it on both ends!"

Open Chang Hai-lung's resume and you find that he has worked at no less than six hotels, each a highly reputed five-star hotel. But "at three of them you can't get your salary on schedule," he laughs wryly. He is by no means the worst off. Due to the recent incident in which a young girl in a Hong Kong tour group came down with a SARS-like fever at Taipei's Kilin Hotel-resulting in the tour group being forcibly quarantined there-the staff were each given only 70% of their severance pay after being laid off.

But another hotel employee with many years of service, Hsu Yung-chien, says that while many hotels have had difficulties maintaining business in the wake of the SARS "onslaught," others actually were still doing fairly well. But their owners had plans to generate greater profits by expanding their premises or moving into other industries, and so they are merely taking advantage of SARS to close up shop and lay off staff for the time being. This has angered employees who are nonetheless at a loss to air their grievances.

"If the owner really wants to stay in business, the employees will certainly stick out the hard times with him," points out Hsu Yung-chien. Besides taking cuts in pay, unpaid leave and so forth, some hotel restaurant deputy managers go back to their old posts, taking off their gloves to wait on tables, while other staff are "transferred" to duties such as cleaning house for foreign executives. While this requires getting used to their new employer's attitudes and understanding their living habits, if such work will permit them to retain their livelihood, all employees will work hard at these jobs.

When the Sogo Department Store's Chunghsiao East Road branch opened after a three-day closure to disinfect its premises in mid-August, it attracted large crowds of early morning customers eager to buy discounted products, reviving confidence among retailers.

Never give up

Of course, regardless whether it is a hotel or a travel agency, these are secondary links in the tourism industry. "No one will come to tour Taiwan just because a hotel is good, or a tour guide is good," analyzes Hsu Yung-chien. In recent years Taiwanese manufacturers have gone to the mainland, and since there are no factories or products for foreign manufacturers to see in Taiwan, they are naturally coming less often. As for tourists, "Does Taiwan have scenery out of a painting like you see introduced on the Discovery channel? And if we don't, why should foreign visitors come?"

The latter part of June has brought a ratcheting down of the SARS epidemic, but Chang Hai-lung understands that at least until the end of 2003, he is not going to be able to find new work in a hotel. Now he is helping a friend sell so-called "SARS-preventing" air purifiers. They are priced at NT$400,000 apiece and commission is 10%, but the profit margin after negotiating with buyers is fairly meager. Regarding his achievements-sales of two units within two months-his wife has vocally expressed her displeasure. But he remains unfazed, going off every day with his thick attache case to call on friends, striving to maintain his spirits and his contacts.

A band of white-haired old industry veterans struggles for survival in the face of the impact of SARS. No matter how bumpy the road ahead, they are still graceful and enthusiastic, and maintain the professionalism and self-esteem of those in the service industry. This spirit may be just what is needed for the rebirth of Taiwan's tourism industry.

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