PETALING JAYA: The once vibrant Malaysian tourism sector, which has been hit hard by the crippling effects of the Covid-19 pandemic, will need to prepare for one of its steepest recovery slopes in history.
Malaysian Association of Tour and Travel Agents president Datuk Tan Kok Liang (pic below) said restoring and boosting confidence to travel will be key to the industry’s recovery.
“Recovery in tourism and travel globally will be highly dependent on a number of factors, most prominent of all the easing of travel restrictions by governments.
“Given that the situation is highly unpredictable, indications are that the tourism industry in Malaysia in general will only see a marked recovery starting to happen 12 to 24 months from now, ” he told StarBiz.
Tan said once the movement control order (MCO) has been lifted, the tourism sector will have to adapt to a “new norm” of travelling and living.
“Already many tourism businesses are beginning to tackle this emerging norm positively, in preparation for when things start to normalise. Restoring and boosting confidence to travel will be the key to our industry’s recovery and this will start with the return of domestic tourism.
“We will start with group travel of less than six persons and thereafter, corporate travel. At the same time, we will need to put in place or upgrade our tourism infrastructure to ensure that the highest standards of health and safety are met.”
With these key initiatives in place, Tan said Tourism Malaysia will then be in a good position to ramp up promotional activities and business-to-business engagements to re-establish Malaysia as one of the more viable destinations to visit.
Tourism Malaysia reported 26.1 million tourists into Malaysia last year, with the top-three contributors being Singapore (10.16 million), Indonesia (3.62 million) and China (3.11 million).
According to Tan, things were still looking good for the Malaysian tourism sector in January.
“No one, however, could have foreseen the severity of the effects of the Covid-19 pandemic and the situation rapidly deteriorated in February and March, both for the inbound and outbound markets, ” he said.
On March 18, Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri announced the cancellation of Visit Malaysia 2020, the same day that the government imposed the MCO to tackle the country’s Covid-19 infections.
The MCO has been extended until May 12.
Tan said the implementation of the MCO and travel restrictions by other countries, brought business to a standstill at the end of the first quarter.
“Early indications estimated that travel agencies alone suffered close to RM500mil in liabilities and losses.”
Tour company Apple Vacations was severely hit by the impact of the pandemic as early as February, its group managing director Datuk Seri Koh Yock Heng (pic below) said.
“Since February, we recorded zero revenue and significant disruption to our business due to the Covid-19 pandemic. We received 6,000 passenger cancellations, amounting to sales loss of RM50mil for forward bookings from March to year-end.”
Koh believes that the tourism sector will likely recover at the end of the year, assuming that most countries reopen their borders and a vaccine is found by then.
“Travelling is an essential part of many people’s lifestyle. In any case, I believe that the Asian market will be the first to recover, compared with western countries.”
Meanwhile, Parlo Bhd, a leading travel management and services group in Malaysia, also started seeing an impact to its business early in the year.“The first quarter was promising only for the month of January. After Chinese New Year, similar to most businesses, things started declining when news of the Covid-19 crisis broke out, ” said chief executive officer Dani Yap. (pic below)
“By mid-February, many customers started asking for postponements of their travels or seeking to cancel their trips. Overall, in the first quarter itself, we could see a downtrend in sales volume.”
At the moment, Yap doesn’t think the lifting of the MCO will have a significant impact on the local tourism business.
“Lifting of MCO doesn’t necessarily mean reopening of our borders. Until that happens, tourism will not really see much change. We foresee things starting slowly again by July or August and for things to return to normal, sometime next year.”
Last month, StarBiz reported that the local hotel industry has already laid off 6% of its employees, with a growing number of its staff taking unpaid leave and pay cuts as the sector crumbles from the impact of the Covid-19 pandemic.
According to the Malaysian Association of Hotels (MAH), based on a sampling size of 41,000 employees, 20% were already given pay-cuts, while 26% are on unpaid leave.
The highest number of lay-offs were in Melaka (15%), Johor (12%), Perak (12%) and Negri Sembilan (11%). Kedah, Perlis, Pahang and Kelantan have yet to report any lay-offs.
MAH chief executive officer Yap Lip Seng said the hotel sector is already facing a number of challenges as it is.
“The most severe concern here reflects on the lack of enforcement on illegal activities in the tourism industry, such as illegal hotels and home-sharing (airbnb) that are operating above law, contributing no taxes and is a leakage to the industry, ” he said.
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