Hong Kong-listed travel agency EGL Tours has laid off 120 tour guides as business activity remains dormant owing to border restrictions during the pandemic.
The layoff accounted for a quarter of its existing workforce, with a total of HK$20 million expected to be paid to retrenched staff.
This marked the second major retrenchment exercise conducted by a Hong Kong travel agency, after Wing On Travel Service sacked 120 staff last December.
EGL Tours executive director, Steve Huen, told TTG Asia that affected employees were tour guides in charge of conducting tours in Japan and longhaul markets.
“Since our business was dormant for almost one year, only 20 of them chose to continue to work, while the rest opted for no-pay leave over the past 10 to 11 months. (The layoff) is a timely move and we hope to help them by offering some cash payouts before Chinese New Year,” Huen said.
Each retrenched worker received an average of HK$160,000 (US$20,600) in severance pay, with long-time employees (i.e those who have spent 20 years with the company) receiving HK$300,000.
“We promise to give them the priority to rejoin the company when the situation improves and business rebounds,” Huen said, adding that no further retrenchment is on the cards.
An agent, who requested anonymity, said that with many agencies downsizing in manpower to keep businesses afloat during the pandemic, it would be tough for agencies to return to pre-pandemic scale when travel recovers, as many agents may have already switched careers by then.
She added that as an independent travel agent, operating costs are “pretty low”, especially given that she is able to share her office space with two other agents after the Travel Industry Council relaxed the rule. She said they were holding out hope for business to improve at the end of 2021.
Bus operators are also suffering the brunt of prolonged border closures. One such company is Chinalink Express Holdings, a subsidiary of Kwoon Chung Bus Holdings, whose fleet of 550 coaches and small vehicles account for nearly 50 per cent of total market supply.
The company, which provides cross-border coach services between Hong Kong and Guandong province, has seen its staff count plunge from 2,000 before the pandemic to 900 since borders were closed.
Managing director Alan Chan lamented insufficient government assistance for coach bus operators. He said: “We have been losing HK$1.3 million on a daily basis, and most operators owe money to the banks, so it would be a big help if the government could set aside HK$200-300 million for us to cover costs for safety, repair and anti-pandemic measures on coaches.
“Currently, more than 1,000 coach buses have been sitting in a government site in Kwai Chung for months and we call it the graveyard for coaches.”