By Gobie Rajalingam — May 12, 2021
Covid-19 has devastated Timor-Leste’s tourism industry. The country’s Covid response was swift: a year-long ban on international travel, closure of international borders, and restrictions on domestic travel and business operations. By taking these steps, Timor-Leste limited the spread of infections throughout much of 2020, but at the expense of enormous disruptions to the tourism economy.
The Impact on Small and Medium Enterprises
A forthcoming study by The Asia Foundation surveyed 342 micro, small, and medium enterprises (MSMEs) in Timor-Leste and found that tourism-related businesses in aggregate have been operating at just 23% of their pre-Covid level. Almost half of businesses that depend on international travelers have closed or curtailed their operations.
Government Subsidies: Awareness and Effectiveness
From June to August 2020, the government of Timor-Leste outlined a series of subsidies and allowances to support both employers and employees affected by the pandemic. The survey found, however, that awareness of these subsidies among businesses was low — ranging from 20% to 65% depending on the type of subsidy — and that businesses believe the subsidies do not address priority areas.
For example, one of the government’s key initiatives has been a social security subsidy to employees. Only 7% of employers identify this as an important service, while over a third of MSMEs (35%) and tourism businesses (38%) say what they really need is:
- Credit guarantees
- Short-term tax exemptions
Recognising a lack-of-information problem, The Asia Foundation, with support from the New Zealand Embassy in Timor-Leste, created a business information portal — www.empreza.tl — to be used in cooperation with the country’s Chamber of Commerce and Industry to disseminate up-to-date information to the private sector.
Reopening: Travel Bubbles and Vaccination
As Timor-Leste lays the foundations for economic recovery, the government’s Council of Ministers approved Decree Law No 24/2021 on April 28, 2021, suspending compulsory quarantine for fully vaccinated travelers. The new law lays out a process for establishing “travel bubbles” with selected nations.
For this policy to be successful, however, Timor-Leste must vaccinate its own vulnerable population, which is currently experiencing the rampant spread of Covid following last month’s Easter floods and the mass displacement that followed.
What Post-Covid Travelers Prioritise
Several considerations remain before Timor-Leste can expect an increase in tourism demand. In the Asia-Pacific, travelers now emphasise health and safety above all else when selecting accommodations:
| Priority | % of Travelers |
|---|---|
| Clear health and safety precautions | 73% |
| Location | 46% |
| Price | 37% |
| Exclusive offers | 35% |
To ensure Timor-Leste is equipped to respond to this market, health and safety should be prioritised at every juncture of the customer journey — aviation, surface transport, accommodations, and food and beverage facilities.
Marketing, Coffee, and Raising Awareness
Despite this progress, Timor-Leste remains a little-known destination, with just 24% of potential travelers having seen any marketing information. Lack of awareness affects exports as well as tourism. Coffee has historically been the country’s largest non-oil export, but coffee exports in 2020 fell by over 75%. Almost 20% of Timorese people rely on this crop for their livelihoods.
As the annual harvest approaches, a marketing campaign could play a dual role — piquing the interest of both coffee drinkers and potential travelers in key markets.
The Path Forward
After enduring the pandemic for more than a year, the pre-Covid strategies for increasing tourism to Timor-Leste remain the same:
- Targeted marketing to reach international audiences
- Support to small businesses through meaningful subsidies
- Accessible information for both domestic and international travelers
The Timor-Leste government already has tools to do this through its official tourism website and social media platforms, but must actively market the nation in a manner responsive to the interests of post-Covid travelers. There is an equally pressing need to make better use of data on the pandemic’s impact on tourism to shape subsidies that more effectively facilitate economic recovery in the months and years ahead.