ECONOMIC COUNCIL TO THE PRIME MINISTER OF THE RM

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund
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Restrictions imposed on interstate traffic by the authorities of the Republic of Moldova and other states have seriously affected tourism. The first blow was from the cancellation of previously made reservations. In the absolute majority of cases, these bookings accounted for more than 60% of turnover. Thus, travel agencies lost about 52 million lei in orders, airlines 40 million lei, hotels 29.5 million lei, and event organizers 2.5 million lei. According to representatives of the sector, they are “on the brink”. Just the hotel industry (part of the HORECA) gives signs of life, although during the quarantine the level of occupancy in the hotel decreased down to 10%, and began to slowly increase to 20-30% after the quarantine. A peculiarity of inbound tourism is that it is largely determined by business visits and official delegations, so remote work and online conferences make it impossible to return to normality in the foreseeable future. Wineries are not in such a catastrophic situation, they manage to ensure a capacity of 50% from domestic tourism numbers.

It is important to note that travel restrictions also affected external tourism. According to estimates, the annual cost of foreign holidays of Moldovans is approximately 150 million euros. Domestic tourism is not a viable alternative. Even though our nationals  “rediscover Moldova”, accommodation expenses are most often avoided, given that the short distances allow casual tourists to return home. On the other hand, accommodation opportunities are not always present either. Of the 33 rural guest houses, only 5 (those with loans to repay) were officially open at the time of consultations. A remarkable exception are wineries that due to tastings, have managed to supplement 50% of accommodation capacity.

Operators and travel agencies have stopped their activity. The unofficial policy of companies in this segment was “Whoever can, saves oneself”. Among those” rescued ” were directors and accountants, the rest of the staff was made redundant.

Looking ahead, the prospects for the tourism industry are quite bleak. According to experts, the new tourism model will have a number of peculiarities.  Safety of people during their stay will come first, followed by the tendency to travel within the country or neighboring countries (near-shoring). Sustainable tourism will be of greater importance where eco-friendly activities in the middle of nature will be preferred to those which involve crowds. The hotel industry is trying to adapt to new realities by implementing security protocols and reducing personnel costs. The number one priority in relation to the government is the application of safety measures so that the Republic of Moldova does not appear on the “red list” of other states, warnings are issued for visiting Moldova and/or requirements are imposed on people visiting our country. A request from the sector is the establishment of a” green line” when it come to sanitary-epidemiological controls. The new hygiene protocols contain interpretable rules, and businesses  implement them un-evenly risking fines from ANSA. The use of free capacity in hotels would also be significant. They could provide isolation conditions at minimal cost for medical personnel and other professions on the front line in the fight against COVID-19 . In addition, the domestic tourism sector would need a boost in the digital environment with the reduction of costs for payments processing.

* This information is collected during the discussions conducted by the experts who elaborate the Impact Study of the COVID-19 pandemic on the sectors of the economy. The data can be taken from the website www.consecon.gov.md only with the obligatory mention of the source “Economic Council under the Prime Minister of the Republic of Moldova” and the specification that “The impact study of the COVID-19 pandemic on the economic sectors is carried out by The Economic Council jointly with the Ministry of Economy and Infrastructure, with the support of the European Bank for Reconstruction and Development and the United Kingdom Government Fund for Good Governance. ”

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund, and the International Finance Corporation’s Investment Climate Reform Project funded by the Government of Sweden’s International Development Agency.

The Secretariat of the Economic Council to the Prime Minister is supported by the European Bank for Reconstruction and Development, funded by the UK Government’s Good Governance Fund.