COVID-19 management and the effectiveness of government support of the tourism SMEs in Phuket

Abstract

Not only the major segments but also SMEs have provided economic significance to the tourism industry. However, the tourism industry was affected negatively by both the COVID-19 pandemic and the government regulations that were issued to limit the virus spreading of the virus. However, SMEs have different characteristics in terms of managerial structures, business size, and financial capability, so the impacts of the pandemic and their crisis management and responses are different from the large organizations in the industry. As well as government support which was provided to the tourism sector to mitigate the crisis may result differently in the SMEs, compared to the large companies. This paper focused on tourism SMEs in Phuket with the aims (1) to determine the impacts of the COVID-19 pandemic on tourism SMEs, (2) to examine the crisis management of the tourism SMEs including the post-crisis plans, and (3) to identify the influential factors of the effectiveness of the government support on the tourism SMEs. The data were collected through semi-structured interviews with 12 respondents from local tourism SMEs. The result revealed the impacts including zero revenue, substantial income reduction, cash flow struggle, and asset deterioration. Several crisis responses were also determined but SMEs were reluctant to lay off employees or adopt online operations. As the post-crisis plan, SMEs debated the integration of the new normal procedures and denied switching to non-tourism businesses. The effectiveness of government support can be determined by factors including the interest rate and repayment plan, funds flexibility, accessibility, and follow-up process. Last, this research offers insights into the crisis management of tourism SMEs, and feedback for policymakers to improve the support