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An Assessment of Impacts of COVID-19 on Micro, Small, and Medium Enterprises and Employees in the Tourism Sector in Cambodia

The Cambodian economy has been heavily dependent on three major sectors, namely manufacturing, agricultures, and services to generate growth. Part of the services would be the income generated from tourism, which plays crucial roles in absorbing the labor force in Cambodia’s market. Unfortunately, with the prolonged pandemic globally just as much as the local community outbreak, the tourism sector of Cambodia stands vulnerable to this external crisis, pushing MSMEs and employees in the tourism sectors to experience bankruptcy, sales declines, and unemployment. Amid the initial period of the pandemic, although tourism sector has been impacted by the border restrictions, and the absence of or dramatic decline in the international tourist inflow, Cambodia’s tourism sectors could still withstand the pandemic thanked to the force of domestic tourism whereby the country did not heavily experience local community outbreak up until the end of the year 2020. Therefore, this research is done in a timely manner whereby the impact of the pandemic was at its peak and its prolonging phase, which allows the team to well-roundly get a picture of the tourism sector in the crisis period. The study was done in a mixed-method analysis to collect data on the possible obstacles in tourism sectors for SMEs and employees, carrying out both physical and phone-interview on 300 tourism MSMEs in Siem Reap, Phnom Penh, Sihanoukville, Kompot, Kep, and Mondulkiri, as well as 6-8 workers as case studies to support and complement the findings. An overall finding demonstrated that over 84% of businesses went through a decline of revenue at about the rate of 50 to over 75% of their revenues despite shifting their business model to cope with the crisis. Majority of those businesses have to reduce working hours and the number of employees, and attempt to cut off some more with less than 50% of the businesses stressed on their no hope to rehire back the employees. It has also been found that major obstacles lie within the limited capacity and capability to transform their business model, financial access due to the lack of collateral, high interest rate, and complicated procedures. Despite the vaccination rollouts, economic recovery is critical for the government as businesses are at high risk of collapse. On a positive note, in the post-COVID-19, nearly 80% of MSMEs plan to incorporate technology, health procedures and reexamine their tourist target groups and tourist sites to attract more customers.