Unrestricted thoughts - Virus' effects on hotels, airlines, tourism


  • Economy
  • Wednesday, 08 Apr 2020

The damage to the tourism industry is undoubtedly enormous and it is heartening to see the government rope in a number of hotels to act as quarantine centres for returning Malaysians and foreigners.The government, according to Senior Minister Datuk Seri Ismail Sabri Yaakob, (pic) will pay RM150 a day for accommodation and food for each person quarantined. That works out to be RM1,400 over a 14-day period and that money is a lifeline for 45 three- or-more star hotels that are gazetted to act as such centres in the country.

IT seems like a distant memory now of the events from the initial Covid-19 outbreak that hit the tourism-related industry.

The situation has moved up so many gears that the plight of the hotel and tourism industry is now grouped with the troubles of many other industry groups.

They were, however, the first to feel the brunt of flight and tour cancellations. The industry received help by encouraging domestic tourism to fill the void left behind from foreigners not travelling to Malaysia.

Eventually, the gravity of today’s Covid-19 descended into the mindsets of Malaysians and those efforts were scuttled.

The world now watches and reacts as the spread of the disease has caused the loss of many lives and much damage to economies.

The hotel industry though were consistent in revealing how bad conditions are for the industry.

The drought of occupancy rates from the lack of tourists, coupled with the movement control order (MCO), meant that the Malaysian Association of Hotels (MAH) is projecting a revenue loss of RM560.72mil for just the MCO period as occupancy rates fall to 11% from 32% in the middle of last month.

That has meant that 2,041 employees have been laid off, 9,773 given unpaid leave and 5,054 people have taken a pay cut as at the end of March.

Those numbers are expected to rise in the next few months with any recovery only expected in the third quarter.

Then there are the airlines. AirAsia has grounded basically its entire fleet and asked a number of its staff to take pay cuts. Malindo has told 70% of its staff to take unpaid leave.

Malaysia Airlines too has asked some staff to take no-pay leave and the senior team to take a pay cut.

The damage to the tourism industry is undoubtedly enormous and it is heartening to see the government rope in a number of hotels to act as quarantine centres for returning Malaysians and foreigners.

The government, according to Senior Minister Datuk Seri Ismail Sabri Yaakob, will pay RM150 a day for accommodation and food for each person quarantined.

That works out to be RM1,400 over a 14-day period and that money is a lifeline for 45 three- or-more star hotels that are gazetted to act as such centres in the country.

Then there is the prospect of funnelling financial aid to the airlines in the country. AirAsia has more than RM2.6bil cash but its cash burn rate is RM527mil a day, according to a report.

Should conditions to combat Covid-19 persist for longer than what people hope, there is a very real chance AirAsia, along with other airlines, will need more money either through a loan or other instruments that may involve equity in order to survive.

The setback affecting the tourism-related industry is no fault of theirs and the government’s decision to help where it can will go in preserving jobs and keeping hotels and airlines alive to one day continue their role in rebuilding the tourism industry in Malaysia.

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