Streets crowded with tuk-tuks carrying visitors to Angkor Wat; bustling restaurants and bars; hotels and guesthouses pre-booked for the Water Festival – these scenes vanished when the COVID-19 pandemic stopped international and domestic tourists from visiting Cambodia’s sights.
Although the country’s public health situation was comparably unscathed throughout 2020 – Cambodia recorded only 331 active cases and no deaths by November 2020 – movement restrictions decreased household incomes by 30 to 60%. The situation escalated in 2021 when Cambodia went from a few cases to more than 60,000 by mid-July 2021.
Contributing over 70% of jobs and 58% of GDP in 2018, Cambodia’s micro-, small and medium-size enterprises (MSMEs) have been profoundly affected by the pandemic. The tourism industry, Cambodia’s second-largest driver of economic growth and where many MSMEs work, is especially in crisis. In 2019, tourism generated about US$4.9 billion, nearly 20% of the country’s GDP, while COVID-affected 2020 saw international tourism revenue plummet nearly 80%, to US$1.023 billion.
In 2020 and 2021, to understand the impact of COVID-19 on small businesses in the region, The Asia Foundation collaborated with local partners in carrying out multiple surveys of MSMEs in tourism, handicrafts, manufacturing and other industries across Cambodia, Lao People’s Democratic Republic, Malaysia, Myanmar, Thailand, and Timor-Leste.
In July and November 2020 and in April 2021, we also surveyed registered and unregistered businesses in Cambodia’s tourism sector. The surveys indicated that 99% had been affected by the pandemic and lockdowns, with over 50% severely affected in April 2021. As COVID-19 restrictions were extended, the situation worsened: 54% of respondents reported cash flow problems in November 2020, increasing to 83% by April 2021.
The surveys revealed a link between national COVID-19 caseloads, perceptions around business survivability, and adaptation efforts. In Cambodia, a slight majority of surveyed businesses considered COVID-19 a threat to their operations in July and November 2020, when caseloads were low, but by April 2021 more than three-quarters of businesses viewed the pandemic as a serious threat.
In July 2020, 40% of Cambodian tourism businesses reported pandemic-related layoffs, while 60% had held steady. Only 16% reported letting staff go between July and November. Instead, many had decreased employee hours or were rotating hours to keep workers. However, by April 2021, facing greater restrictions and a worsening public health crisis, 33% of Cambodian tourism businesses reported having laid off employees – twice as many as in November.
Idled tourism workers sought any short-term work opportunities to make ends meet. In Siem Reap, the gateway to Angkor Wat and other attractions, many women – who were disproportionately affected by layoffs – left the city, hoping to find jobs in the garment industry in Phnom Penh. Unfortunately, COVID-19 containment measures caused the garment factories to close.
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