Budget 2021: Hotels need more assistance to stay open

The third wave of the pandemic has forced many hotel owners to come up with new strategies to keep business afloat. — Bernama

Budget 2021 does not provide much assistance to the local hospitality sector, which has been severely hit by the Covid-19 pandemic, said local hotel associations.

Malaysian Association of Hotels (MAH) chief executive officer Yap Lip Seng said the Budget "fell short of tourism industry’s expectations".

"The tourism and hotel industry are deeply concerned with the lack of immediate assistance to stakeholders forced under heavy cash flow burden due to travel restrictions both internationally and domestically, ” he said.

According to Yap, hotel occupancy fell to an unprecedented low in March at approximately 5% when the movement control order (MCO) was implemented.

“From the announced initiatives, little was mentioned on sustaining tourism businesses other than the (three-month) extension of wage subsidy at the same amount of RM600 per employee per month, ” he said.

The Star earlier reported that hotels registered booking cancellations throughout the country following news of the conditional MCO in Selangor, Kuala Lumpur, Putrajaya and Sabah.

Yap welcomed the exemption of HRDF levy for six months, but said the wage subsidy is insufficient as the hospitality industry had lost almost 80% business amid the pandemic.

“Without higher cash assistance to businesses and leaving loan moratorium at the discretion of financial institutions and commercial banks, industry stakeholders are left stranded and will be forced to make difficult decisions as well as take drastic actions to survive, ” he said.

Yap added that it's vital to prevent further closure of hotels nationwide.

"Malaysia cannot afford and should not allow any more closures in the tourism industry or risk even higher costs of rebuilding the industry and losing tourism capacity, leading to loss of revenue in the long run," he said.

Malaysia Budget Hotel Association (MyBHA) national deputy president Sri Ganesh Michiel also said that the Budget does not help the hotel industry.

“The government should have given more tax incentives to encourage domestic tourism. The current spike in recent Covid-19 cases has badly affected the industry again, ” he said.

Ganesh said it would be hard to sustain hotel businesses without further assistance from the government.

“Hotel closure would affect those in the supply line as well. If hotels are closed, no one would be buying new supplies, ” he said.