(Yicai Global) Feb. 7 -- China's Ministry of Culture and Tourism will temporarily refund most of domestic travel agencies' service quality deposits to help them get through the new coronavirus epidemic that has caused many booking cancellations.
The ministry will give back 80 percent of the deposits that agencies put it when opening for business, the MCT said in a statement yesterday. The companies should deposit the money again within the next two years.
During the severe acute respiratory syndrome outbreak in 2003, the MCT returned more than 60 percent of the deposits on average, which resulted in sums as large as CNY1 million (USD143,270). The impact of the latest epidemic could be larger for the tourism sector as it started unfolding during a usually busy travel season, Chinese New Year.
China's tourism sector will lose CNY1.8 trillion (USD257.9 billion) this year instead of delivering an expected 10 percent growth due to the epidemic, Hong Qinghua, chief of Lvmama travel agency told the same news source. The government could also refund part of the value-added tax and income tax that firms' paid last year to ease the situation, Hong added.
Giving back the deposits in 2003 played a positive role in revitalizing the tourism sector so raising the rate now should be useful in replenishing these companies' working capital, said a staff member at Trip.Com.
Editor: Emmi Laine