Hotel Industry Brink Of Collapse If Travel Ban Not Lifted

The hospitality industry is the first to be affected when the pandemic showed up and by the looks of it will the last to recover. Hotels have either scaled down or completely shut down due to lack of business and no clear indication when guests will return. With MCO 2.0 the situation is similar here in Malaysia, just when bookings were picking up the government had to prohibit inter-state travel and impose another round of SOP after Covid-19 cases surged in the country. Of late the cases are reported to be stablising and there has been some easing on the restriction, this has prompted the Malaysian Association of Hotel Owners (MAHO) to ask the government to allow hotels to take guests back in.

President, Tan Sri Teo Chiang Hong, called on the government to lift the ban on inter-state and inter-district travel to revive domestic tourism. He added since the country’s border is still closed to foreign tourists, hotels in the country depend wholly on domestic tourists to generate revenue.

“Otherwise, many hotels are no longer able to sustain their business or survive any longer. We  expect to see a number of hotels closing down” claimed Teo.

2020 was a torrid year for hotels, a number of them closed with many suffering heavy losses this resulted in termination of employees and adding to the unemployment numbers in the country which is at all time high.

According to Teo since the Movement Control Order 2.0 (MCO 2.0) was implemented last Jan 13, about six hotels have closed down, while many of those still in business had to resort to putting their employees on a  50 percent salary cut and leave without pay. 

Usually the Chinese New Year festive season is a peak time for hotel business with heavy bookings for rooms and F&B bookings, but unfortunately, not so for this year. A double whammy for the crumbling industry. The association has requested the government assistance and possible increase in the wage subsidy to  RM1,200 – RM1,500 without any cap of employees. This is on top of the electricity bill discounts and loan moratorium for hotel operators who are still servicing heavy interests.

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