Hotels see occupancy rates below 20%

According to a report, the projected occupancy rates currently stand at 11% for March 18-31, 16% for April and 19% for May


LOCAL hospitality players are looking at drier business ahead with the Covid-19 pandemic already affecting them since the beginning of the year, while things are projected to only begin looking up in two months’ time.

Malaysian Association of Hotels (MAH) CEO Yap Lip Seng said the occupancy rate is expected to remain below 20% well into May, whereas the forecast for June is at 25% nationwide.

“This is because of the worldwide pandemic and it is expected to remain low. Even then, it depends whether the Movement Control Order (MCO) ends on April 14 or further extended,” he told The Malaysian Reserve.

According to a report dated March 31, the projected occupancy rates currently stand at 11% for March 18 to 31, 16% for April and 19% for May.

Earlier this year, the occupancy rates nationwide stood at 55% in January, 44% in February and 32% during the March 1-17 period.

Similarly, due to the amount of room cancellations, the losses hotels face have totalled up to RM75.69 million.

The expected amount of losses on revenue throughout the MCO will reach over RM1 billion, parted into RM510.75 million lost during March 18-31, and RM570.35 million for the April 1-14 period.

It was reported that currently, hotels are not expecting recovery until the third quarter of the year.

In order to break even, hotels should have an average occupancy rate of 40%, with additional sales coming in from food and beverage outlets, events and retail.

However, overall sales for some hotels have decreased by over 90%, caused by the increase in customer cancellations for both accommodation and events.

As of March 30, hotels’ manpower experienced 9% pay cuts, unpaid leaves (17%) and layoffs (4%).

Sabah is experiencing the highest rate of pay cut at 18%, Perak for unpaid leave at 36% and 16% for layoffs in Pahang.

The association previously stated that the RM250 billion stimulus package to cushion the Covid-19 impact is below expectations, whereby the amount included a payroll subsidy of RM600 per month for three months for employees earning below RM4,000.

MAH president Kamaruddin Baharin said the association will need to work with what is given and continue to engage and update the government on the ground situation of whether the initiatives are helping.

“The world is still in a ‘lockdown’ and there is no light at the end of the tunnel for tourism until a cure or vaccine is found,” he said.

Yap added that the association has initiated a separate discussion with the finance minister and tourism minister regarding the packages and further proposals.