Hotels struggling to survive


End of an era: Hotel Penaga announced that their employees will be receiving a compensation package.

GEORGE TOWN: The hotel industry in Penang is facing the full brunt of the Covid-19 pandemic and the prolonged movement control order (MCO).

At least three hotels in the state – Jazz Hotel, Hotel Penaga and Jerejak Island Resort – and the Kinta Riverfront Hotel & Suites in Ipoh, Perak, have announced that they will wind up this week.

The employees have been informed that a compensation package was being worked out for them, with the last working day being Thursday.

“The opportunity to regain the losses was made impossible with the implementation of the MCO since March 18, ” a circular stated.

The Edge Markets also reported that Plenitude Bhd, in a Bursa filing, revealed that the hotels it was closing with immediate effect were Mercure Penang Beach, Penang, The Gurney Resort Hotel and Residences, Penang, and Travelodge Ipoh, Perak.

Malaysian Association of Hotels chief executive officer Yap Lip Seng said based on a survey involving 324 hotels in the country, 15% said they might consider closing down permanently, with 35% considering a temporary closure.

He said 93% of the respondents said their hotels needed a minimum of six months’ wage subsidy to stay afloat, with 74% asking for a higher government subsidy.

Yap said the industry was seeking a minimum monthly subsidy of RM1,200, or 50% of the salary, for each employee earning RM4,000 and less, with the subsidy to last till December.

“This will enable employers to maintain their workforce through the period and sustain the industry.

“There must also be a 30% subsidy for those earning between RM4,000 and RM8,000 a month, ” said Yap.

Prime Minister Tan Sri Muhyiddin Yassin had unveiled a special stimulus package worth RM10bil aimed at small- and medium-scale enterprises in a bid to soften the impact of the MCO.

From the total, RM7.9bil was allocated for the Wage Subsidy programme which was increased from RM5.9bil to RM13.8bil.

Yap also said home-sharing operations such as Airbnb must be stopped to enable the recovery of the tourism sector in Malaysia.

He said this was because the platform had been operating quite differently from other locations in the world.

He said Airbnb last reported over 53,000 listings in Malaysia, adding that this would further dampen the local hotel industry.

“Most cities and countries around the world had imposed regulations on it. In Malaysia, home-sharing can be operated freely, benefiting high-income earners who can afford a second or third home.

“Other than displacing locals from major cities, the business model has also caused inflation and increased rental rates. The government must place priority on tax-paying businesses that support the employment of locals, especially in times like these, ” he added.

Malaysia Budget Hotels Association president Emmy Suraya Hussein said 15% of their 2,300 members had already announced a temporary closure until the situation returned to normal.

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