THE local hotel sector, which has been left in dire straits by the Covid-19 pandemic, needs to find ways to remain sustainable as the fight for survival continues.
Malaysia Budget Hotel Association (MyBHA) national deputy president Sri Ganesh Michiel says that many budget hotels are on the verge of closing since the start of the movement control order (MCO) back in March.
“A lot will end up closing in the future, ” he warns.
Recently, a recovery plan to revive the pandemic-hit tourism industry in Malaysia was revealed by the Tourism, Arts and Culture Ministry (Motac). Its minister Datuk Seri Nancy Shukri says the plan would involve restoring confidence in travel, reviving domestic tourism and maximising current resources.
“The plan is designed to develop and revitalise the domestic tourism sector, with the cooperation of every industry player, towards the country’s economic recovery, ” Nancy says during a press conference earlier this week.
The programme will focus on collaborations and partnerships with airline companies, tourism-related agencies and companies as well as collaborations with non-governmental organisations such as Malaysian Association of Hotels (MAH) and MyBHA.
The suggested mechanism for the recovery programme is through vouchers, discounts and cash rebates that will bring direct impact to domestic travellers.
The ministry’s initiative came following the announcement of “green travel bubble” to boost domestic tourism by Senior Minister (Defence) Ismail Sabri Yaakob recently.
Under the travel bubble programme, people from green zones can travel to other zones marked as green.
SOP issued by the National Security Council encouraged travellers to make travel arrangements through licensed tour companies and guides registered with Motac.
This is because the licensed tour companies would arrange the movement permit directly with the police on behalf of the travellers.
Ganesh, who is grateful for the measures introduced by the government, however, feels that the process could be simplified to boost domestic tourism.
“The process involves a lot of legwork such as going to the police station, which isn’t ideal considering the level of Covid-19 infections right now, which have been on a constant rise. The best thing would be to make it available via an online app.
“They need to make it safer and faster, ” he says.
With that said, Ganesh adds that the initiative will have very little impact in boosting the local hotel sector.During the recovery MCO, when interstate travel was allowed, a large portion of the travellers were from the Klang Valley.
“For those staying in states where there are coastal attractions, they don’t need to stay at a hotel to enjoy the beaches. It’s the people within the cities, namely Kuala Lumpur and Selangor, that travel to these places.”
He points out that with Kuala Lumpur and Selangor currently under the conditional MCO, occupancy rates for hotels will continue to remain low.
Separately, MAH says while parts of the country are still under the conditional MCO, the domestic green travel bubble initiative is much welcomed by the tourism industry, with many offering special deals and promotions targeted at year-end holiday makers.
“Malaysians can also purchase hotel deals for immediate travel or future use, ” the association says in a statement.
According to a recent MAH survey, nearly 10% of hotels have already laid off or retrenched employees this year.
The survey, which polled 252 hotels across Malaysia, revealed that 9.92% have laid off or retrenched employees; 32.94% are still imposing direct pay-cuts; 36.11% have reduced employee benefits and 44.44% still have employees on unpaid leave.
The survey showed that about 60.71% of hotels have reduced headcount, with 17.85% reducing by 50% and more. As at Oct 16,63.10% of hotels across the country have received cancellation of events.
MAH chief executive officer Yap Lip Seng, in a recent statement, says this has resulted in loss of revenue from event cancellation worth RM35.6mil, since the spike in Covid-19 cases at the end of September till Oct 16.
In view of the surge in Covid-19 cases, the survey says 94.05% of hotels are allowing changes or refunds for bookings made.
The survey says that 78.17% allowed full refunds, 14.29% allowed refunds with a fee and 74.60% allowed for a change in booking dates, while 5.95% did not allow cancellations or allowed changes to be made.
Since the increase in Covid-19 cases from end-September, MAH says average hotel occupancy rates in Malaysia had suffered immediate drop of as much as 16 percentage points.
According to MAH, average hotel occupancy rates stood at 36.36% as at September and is projected to drop to 25.88% by end-October.
The survey, however, reveals that hotel operators expect average occupancy rates to stay below 30% for the remainder of the year. MAH says average occupancy rates are expected to be at 26.82% and 29.85% in November and December, respectively.
Meanwhile, Tourism Malaysia, in a statement in September, says the country registered 4,252,997 tourist arrivals in the first half of 2020, marking a decrease of 68.2% compared with the same period in 2019.
Last year, Malaysia received over 13.3 million tourist arrivals from January until June.
For the first six months of this year, the tourist expenditure recorded a total of RM12.5bil, a decrease of 69.8% compared with RM41.6bil received for the same period last year.
Similarly, the per capita expenditure showed a decline of 5.3% from RM3,121.60 in 2019 to RM2,956.10 this year.
The Top 10 tourist generating markets were Singapore (1,541,820), Indonesia (702,082), China (401,285), Thailand (348,133), India (153,873), Brunei (135,593), South Korea (118,594), Japan (73,201), Australia (72,103) and Philippines (64,311).
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