Covid-19: Budget hotel industry in Sabah on the mend

An aerial view of Kota Kinabalu, Sabah.

KOTA KINABALU: Budget hotel operators in Sabah can finally breathe a sigh of relief after not being able to do much business over the past two years due to the Covid-19 pandemic.

Malaysia Budget Hotel Association (MyBHA) Sabah chapter chairman James Ong said the industry had suffered due to travel bans and movement restrictions.

He said some operators had to throw in the towel, unable to cope with the financial cost of keeping their establishments open without regular income.

However, he said the reopening of borders as well as the Hari Raya and Kaamatan celebrations this month have given them a much-needed reprieve.

"We are beginning to see the light at the end of the tunnel after two years," Ong said on Wednesday (May 4).

He said most budget hotels have barely any rooms to spare as holidaymakers – both domestic and foreign – make their way to the state.

"The occupancy rate is quite high. For instance, I took a walk in Segama in the city the other day and found that even a very simple hotel had only one room left.

"So, you can say it is brisk business for budget hotels at the moment," he said.

Ong said most consumers also have purchasing power now after people were allowed to withdraw their Employees Provident Fund (EPF) savings.

"This has created a 'mini boom' for us as there is a lot of cash in the market. Of course, this is not sustainable in the long run but it's good for everyone at the moment," he said.

However, he said there is still a long road to recovery for budget hotel operators as they have to compensate for the two years of business inactivity.

He said it will be even tougher to break even with the implementation of the RM1,500 minimum wage this month.

Ong pointed out that the minimum wage would also likely cause the prices of other essentials to go up.

At the same time, he said they also have to bear with challenges like high utility tariffs, unregulated short-term rental accommodation and high commission rates charged by online travel agents, among others.

"We will be lucky if we can recover within the next two years. We have depleted our bank accounts to cover the costs over the past couple of years.

"So we need a lot of help from the government. Any help will do," Ong said.