Abstract:
Arugam Bay (AB) is a world famous Surf tourism destination serving guests from
various parts of the world and providing livelihood for fishing communities
characterized by low income, unemployment, underemployment and inequity.
The COVID19 pandemic has completely disrupted surf tourism in AB and related
tourism sectors of the value chain and this study is aimed at examining socioeconomic impact of the pandemic during the first two quarters of 2020 based on
destination specific firm level micro data. The major economic losses due to the
pandemic in terms of business hours, bookings, employment, income and
investment are very high. For example, booking cancellations were 96% and 36%
in foreign and local markets. The evidence on firm level responses to the crisis
reveled reduced prices, discounts and preparation for COVID-19 threats as most
successful strategies to overcome the challenges of covid-19. The findings on
efficiency and effectiveness of existing institutional support system point to serious
weakness of the system. For example, over 80% of respondents reveled that they
did not receive any cash grants or deferment of EPF/ETF payments. Similarly, a
significant proportion of respondents stated that they did not receive working
capital at 4% interest (78%), tax concessions (69%) and assistance in market
development (64%). On the positive side, over 67% of respondents stated that they
received assistance in connection with labor relations (e.g. termination, salary
negotiation etc.) and improving health standards. Based on this evidence, we have
two major recommendations for policy makers: a) support firm level initiatives to
overcome the challenges of COVID-19, and b) improve institutional support system
at national, provincial and district level.
