By Foo Ming Li
The hospitality industry is also impacted by the unforeseen consequences of the Covid-19 pandemic as the industry relies on local and foreign tourists to keep their profits afloat. With the pandemic measures of lockdown and limited approvals for international tourists are in place, the industry players are engineering some creative ways to sustain themselves.
The Malaysia Association of Hotels (MAH) was established by a group of dedicated and passionate hoteliers in 1974 to ensure the hospitality industry is dynamic and vibrant. Their primary goal and mission is to drive the tourism industry locally as well as globally for the benefits of the association members and boost the nation’s economy.
The long-term goal of the MAH is to enhance the efficiency of the hospitality industry, and to foster cooperation between hotels and all similar businesses within or outside of the areas of the association.
Raj Kumar, acting Chairman of Malaysia Association of Hotels Penang Chapters (MAH-P), said the tourism industry accounts for 10 percent of the world’s gross domestic product and jobs. It has also affected 47.7 million travel and tourism jobs across South Asia.
“Malaysia will lose at least 60 percent of its tourism business by the end of this year. According to a survey conducted by MAH in September 2020, the association found that approximately 35 percent of the hotels had to close temporarily, while 15 percent of hotels are going to close down completely,” he said.
He said the main reasons for the closure of hotels are the overhead cost and manpower cost. The payroll costs of budget hotels are about 25 percent of its revenue, 32 percent for mid-range hotels, and 29 percent for high-end hotels which represent a third of what the hotels are not making. These costs hinder the introduction of measures like imposition of pay cut or unpaid leave, strategies that help retain jobs instead of terminating them.
Kumar said that the hotel sector should be more flexible in allowing tourists to postpone their bookings and not cancel them entirely. In addition, he said hotels can provide food delivery or box meals service to factories to gain income.
The ‘Jom! Experience Penang’ campaign was launched by the Penang State Tourism, Arts, Culture and Heritage Committee Chairman, Yeoh Soon Hin on June 29, 2020. This campaign focuses on attracting domestic tourists to Penang with value-for-money promotions.
Kumar said the initiative is the first of its kind in Malaysia with the objective of instilling confidence towards the domestic tourists as a part of Experience Penang Year 2020.
“The promotions offer visitors a different experience and substantial savings. The campaign also honours essential workers in Malaysia working at the frontlines of the Covid-19 crisis with free passes and attractive deals on hotels and attraction spots,” he said.
Kumar hopes that hotels will benefit from domestic tourists for the long-term sustainability of the hotel industry.
On the other hand, the Malaysia Budget Hotel Association (MyBHA) was established in 2001 owing to the initiatives of Tan Sri Sheik Kadir, the former Ministry of Tourism, Arts, and Culture (MOTAC). The aim of the association is to support hotels that are two star ratings and below, which are unable to register their business, and apply for business licensing from the Ministry of International Trade and Industry (MITI). This initiative facilitates effective communication, as MOTAC can effectively connect all budget hotels across the country and provide assistance and support.
MyBHA National Trade and Bureau Chairman, Andy Lau said that all hotels in Penang are affected by the pandemic at various levels. One example of such an effect is the lack of foreign tourists that has affected the income of all hotels in Penang, as they usually visit Malaysia during the festive seasons from October to February every year.
Lau adds that the economy of budget hotels in Penang are impacted by the performance of mid-range and high-end hotels due to the competitive pricing of hotel rooms to attract domestic tourists.
“The sudden slash of pricing of the mid-range and high-end hotels room has caused an unhealthy competition in the hospitality sector. Budget hotels are unable to compete with them due to their limited facilities and choices of room sizes,” he said.
Other than offering local tourists attractive hotel room prices, he said the hotel has decreased its expenses and pool of staff to save some costs as they are using the funds of the hotel cash pool to keep the business running during the pandemic.
“There are some hotels that were already struggling to keep businesses afloat before the advent of the pandemic. When the government announced the lockdown, this worsened the situation for struggling businesses. Some hotels had to slash expenses and staff as they solely rely on the funds of the hotel cash pool,” he said.
Lau said that the Ministry of Tourism in Penang is helping to decrease the economic burden on the hospitality industry by waiving the tourism tax for six months from July 2020 onwards. He said that the tourism government has plans to assist the tourism and hospitality industry in Penang but it is not effectively executed due to the pandemic.
Although the Ministry of Tourism in Malaysia is newly formed, he hopes that the Ministry can promote local tourism to gain support from the locals.
“The Ministry could promote our local tourism, a strategy adopted by governments in Taiwan and Thailand. Both countries promote local tourism,” he said .