PETALING JAYA: Average hotel occupancy rates are projected to hover at around 20% during the first quarter of this year, as Malaysia continues to grapple with the ongoing Covid-19 pandemic.
Malaysian Association of Hotels (MAH) chief executive officer Yap Lip Seng (pic) said a recovery in the occupancy rate can be expected once the vaccine has been successfully rolled out.
“Vaccination programmes as of now are not expected to contribute to tourism recovery, ” he told StarBiz.“While the hotel industry gained from the year-end holidays last year, where hotel occupancy peaked at 43% over the weekend, it dropped rapidly to below 20% since the announcement of the movement control order last month. The first quarter of 2021 would likely be below 20% on average.
Based on the government’s projection, Malaysia is expecting 80% of the population to be vaccinated only by the first quarter of 2022, said Yap.
“This will not be sufficient for full reopening of tourism activities and in addition to that, we have not seen any forward blueprint that facilitates travel of vaccinated persons.”
Yap said a system needs to be in place to ensure economic sectors, especially tourism, can take advantage of the vaccination program to drive its recovery.
“The government also needs to consider priority vaccination for the tourism sector and hotel employees to build and drive confidence for inbound travelers.
“In addition to that, recovery of international tourism would be highly dependent on the success of vaccination programs worldwide.”
According to MAH data, the average monthly hotel occupancy rate stood at 32.43% in 2020.
Average occupancy rates were highest in January at 59.48%, before plunging to a low of 7.58% in April, after the movement control order (MCO) was implemented on March 18.
Average occupancy rates would gradually pick up from May onwards following the implementation of the conditional MCO, peaking at 44.26% in September.
The occupancy rate would fall to 28.55% and 20.62% in October and November respectively as daily Covid-19 cases would begin surging.
The average occupancy rate for December however was higher at 36.05%, owing to the relaxation of interstate travel restrictions towards the end of the year.
The MAH in a recent statement said more hotels are reportedly closing or planning to close, ever since the implementation of the second MCO in January.
“This is the harsh reality of the industry where to date, unofficially more than 100 hotels had ceased operations since March 2020, affecting over 7,000 employees directly, with the rest either on a prolonged pay-cut or unpaid leave.
“The second MCO has robbed the industry of any hopes of a recovery this year and the industry is set to lose at minimum of RM300mil in revenue averagely for every two weeks of MCO, after losing an estimate of RM6.5bil last year.”
In the same statement, MAH president Datuk N Subramaniam said the local tourism and hotel industry employs 3.6 million people and is one of the main contributors to the country’s economy.
“We must be ready for recovery and maintain our tourism capacity as well as competitiveness in the region.”
The association has also proposed to the government to place the tourism and hospitality workforce onto the immunisation program’s priority list after front-liners alongside high-risk groups, to prepare and assure the world that Malaysia is ready to receive international tourism once the borders reopen.
According to property consultancy CBRE|WTW in its Market Outlook Report 2021, hotels are being forced to evolve to survive by lowering operational overheads, elimination of work duplication and finding various alternative sources for revenue.
“Some hotels are operating only 50% to 60% of their available room capacity as they move to recovery. Due to the long-term timetable of global economic recovery, Covid-19 and prevailing low travel confidence, the hotel sector is facing a very difficult period.
CBRE|WTW said the tourism sector will continue to rely on domestic travelers where interstate travel is allowed.
“Continuous tax relief aid from the government and attractive room packages by the hoteliers are important to boost the tourism sector. Hotel performance remains subdued with hotel operators striving to remain afloat until the market recovers.
“Recovery of the hotel sector will depend largely on the end of the Covid-19 outbreak and the opening of international borders. Any further setback such as another wave of the pandemic could worsen the expected recovery.”
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