Hotel room cancellations hit RM67m in just 46 days

The impact (of the virus) is quite substantial for the immediate period, but we are more concerned of the coming period where demand has dropped significantly, says MAH CEO


THE local hotel industry’s losses topped RM67 million due to room cancellations in just 46 days as the coronavirus outbreak almost grinds the sector to a halt.

The outbreak, which started late last year in Wuhan, China, has battered tourism-dependent sectors across the globe. Worries about contracting the deadly virus have forced people to cancel vacations, delay business travels and postpone events.

Despite Malaysia being one of the countries least affected with no mortality reported thus far, the local hotel industry has been bludgeoned largely due to its dependence on foreign tourists.

Kuala Lumpur is also among the top 10 most visited cities in the world. Malaysian Association of Hotels (MAH) CEO Yap Lip Seng said between Jan 22 and March 9 this year, local hotels recorded room cancellations totalling RM67.49 million.

“The impact (of the virus) is quite substantial for the immediate period, but we are more concerned of the coming period where demand has dropped significantly,” he told The Malaysian Reserve recently.

But, he said, it is still too early to gauge the year-on-year impact. Last year, the tourism industry had already witnessed an overall drop in arrivals.

Based on the association’s research, most of the room cancellations are from source countries, especially China, followed by Malaysia, Singapore, Taiwan and South Korea. Research showed Malaysians were also cancelling their bookings due to fear of the coronavirus.

According to the figures, hotels that are dependent on these source countries, especially visitors from China, are the worst hit by the outbreak.

About 37.19% of hotels are up to 10% dependent on Chinese tourists, while another 24.12% of hotels depended on between 11% and 20% on visitors from the world’s populous nation.

According to MAH’s figures, 21.69% of the overall room cancellations originated from online travel agents, followed by free independent travellers or direct hotel bookings (17.38%) and conventional travel agents in groups and online travel agents that connect business to business (16.46%).

Hotels have implemented precautionary measures in response to the outbreak, such as making hand sanitisers widely available and offering face masks for visitors. Hotels have also slashed prices to woo customers, but the response has been slow as people are gripped with fear.

The Malaysian Reserve previously reported that the association had targeted a 30% occupancy rate for the first quarter of 2020 in order to reach half of what was achieved in the same period last year.

Total deaths due to the virus crossed 4,200 (at press time), while confirmed cases topped 120,000. More than 1,000 people have contracted the deadly virus in the US, while the death toll was at 31.

Countries like Italy, South Korea and Iran are scrambling to contain the spread of the virus. People are staying indoor, while schools and universities have been closed and major gatherings cancelled.