More hotels in Malaysia will shut down before they're allowed to reopen again

Hotels in Malaysia lose an estimated RM300mil for every two weeks of closure during the pandemic. — MARTEN BJORK/Unsplash

The hospitality sector in Malaysia will likely crumble before Covid-19 cases are kept under control and hotels are allowed to operate again.

Further delays to the reopening of hotels will threaten the industry’s survivability and impact livelihoods of industry employees, said OYO vice-president and country head (Malaysia & Singapore) Tan Ming Luk.

“The hospitality industry, which loses an estimated RM300mil for every two weeks of (closure during) the pandemic and ongoing travel restrictions, cannot wait for the whole country to get case numbers under control, looking at the difficulty in managing hotspots, or even for 60% of the population to be inoculated,” he said in a statement.

According to Tan, the government needs to re-strategise its Covid-19 containment measures by adopting a more targeted approach instead of broad sweeping restrictions.

Tan said further delays to the reopening of hotels will threaten the industry’s survivability. — OYOTan said further delays to the reopening of hotels will threaten the industry’s survivability. — OYO“This is especially true in sectors like hospitality that are reliant on the ability to travel interstate, where states with few cases are still held hostage to the performance of more populous states,” he said.

Despite the various phases of movement control order and lockdown measures, Tan pointed out that reported Covid-19 cases in the country have been erratic.

“The tell-tale signs are clear – the lockdowns and MCO are not succeeding in curbing the spread of the virus,” he said.

ALSO READ: Hotels in Malaysia provide guests a safe space to sleep better amid pandemic

Measures to survive

A recent survey by the Malaysian Association of Hotels (MAH) revealed that a huge majority of hospitality workers (63.13%) in Malaysia have been put on unpaid leave.

MAH chief executive officer Yap Lip Seng, in an interview with Utusan Malaysia, said hotels have been forced to implement several cost-cutting measures to survive.

These include cutting workers’ salaries (44.6%), retrenching their workforce (14.06%), reducing employee benefits (34.69%) and assigning other duties to workers (73.75%).

The survey involved 320 hotels nationwide.

“Based on MAH statistics, about 70% of hotels are still operational. Some are operating as quarantine centres and the rest are dependent on customers from the medical, and oil and gas sectors,’’ Yap said.

Even then, he revealed that occupancy rate does not exceed 20%.

MAH, on its part, is pining for a targeted reopening of hotels in locations where herd immunity has been achieved.

Yap, however, doesn’t think that the current rate of vaccination was satisfactory enough to allow for a full-scale reopening of the tourism and hospitality sector.

The recent Pemulih aid package has provided some temporary respite for local hoteliers.

According to Yap, the wage subsidy programme that was announced would help employers with subsidies encompassing every level of the workforce.

Prime Minister Tan Sri Muhyiddin Yassin, during his announcement of Pemulih, has also assured that the government will consider appropriate allocations to rehabilitate and revitalise the industry when tourism activities are allowed again.

Open hotels for vaccinated guests

Malaysia is currently under the four-phase National Recovery Plan (NRP). Interstate travel, domestic tourism and social activities can only resume in Phase Four, when 60% of the population has been vaccinated.

The fourth phase of NRP is only expected to take place in November until December.

OYO’s Tan said mindsets need to “change from what we cannot allow to what we can allow”. He is pushing for hotels to be opened for vaccinated guests.

“Malaysia should emulate Thailand in initiatives like the Phuket Sandbox but on a wider national level, and allow hotels to serve guests who are fully vaccinated,” Tan said.

Such a move would also generate tourism receipts and boost the country’s economy, he explained.

“The Thai government expects about 100,000 foreign tourists to visit Phuket in the third quarter of this year and generate THB8.9bil (RM1.15bil) in revenue – and we should make our own targets,” he said.

Tourism is the third biggest contributor to Malaysia’s GDP, after manufacturing and commodities. The tourism sector contributed RM86.14bil to Malaysia’s economy in 2019.

However, the overall Malaysian tourism industry has already lost RM100bil in total since the start of the pandemic.

Above anything else, Tan said hospitality players in the country seek clarity on when they can restart operations.

The government, Tan said, should trust the hospitality industry to do what’s required to keep their guests safe at all times.

“After all, the industry has proven itself an able and willing partner in the fight against the pandemic. It’s now time for the government to reciprocate that trust,” he concluded.

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