Hotels run on cost cuts and manpower control
Hotel / graphic by MZUKRI

by NUR HAZIQAH A MALEK/ graphic by MZUKRI

HOTEL operators and owners are currently running on cost cuts and controlling the number of manpower during the zero income period, while reserves depleting into the next month.

Malaysian Association of Hotels CEO Yap Lip Seng said large chains are supported by having company reserves, while smaller ones are resorting to closures.

“Many are applying for Special Relief Funds (SRF) and loans, but it is difficult due to the uncertainties,” he told The Malaysian Reserve (TMR).

TMR previously reported that the SRF has not provided much assistance to hoteliers, specifically budget hotels, as financial institutions see the industry as “high-risk”.

Hotels, having been affected by the pandemic since the early stages, are further facing unfair treatment as most are on rented property. Although the government had encouraged owners to give discounts for rentals, it was not made compulsory. The estimated loss of revenue for hotels is RM6.36 billion for the entire year.

Industry players are not expected to record further profits with occupancy below 40%, which spells losses from March to the rest of the year.

The projected continuous losses are also expected to extend into 2021. Although discounts were offered, including 15% on electricity bills, the industry is still incurring losses. Pahang’s hotel industry has recorded as much as RM500 million in losses, while budget hotel operators are losing approximately RM60 million.

Meanwhile, Malaysian Association of Tour and Travel Agents (Matta) president Datuk Tan Kok Liang was reported as saying that the travel industry would have to rely on restoring and boosting travel confidence via easing of travel restrictions by the government.

“Given the situation is highly unpredictable, indications are the tourism industry in Malaysia in general will only see a marked recovery starting to happen 12 to 24 months from now,” he said.

Being one of the earliest industries to have been hit by the pandemic’s effects, the industry is currently ironing out recovery details.

Netizens have also been sharing their thoughts on the plight of the industry.

On Twitter, user @MuhdRidwan_S said he is saddened by the effects the virus outbreak had on the travel industry.

“Many staff such as myself have lost our jobs, hotels have to force closure, airlines at high risks and many other effects are looming over us.

“And many long-time players say the industry will only slowly recover after one year. That’s only to recover, but how long until we return to the state we were in prior to the outbreak?” he posted.

Hotels such as G City Club Hotel Sdn Bhd, Kinta Riverfront Hotel and Suits, and Jazz Hotel in Penang have all closed shop.

Netizen Faizal Hamssin tweeted the industry was already struggling prior to the outbreak, due to the competition from Airbnb and homestays, as well as oversupply of rooms, which grew by 80% between 2009 and 2019, with guests only increasing by 35%.

“I would not be surprised if some of these hotels have been bleeding the red for a while, with very tight cashflow, short of liquidity and taking a loan may not be viable.

“Plus, the travel industry will take time to recover, especially international travels,” he said.

In all attempts to also deal with the Conditional Movement Control Order which began on May 4, hotels are offering takeaway and home deliveries from their kitchens, inclusive of Impiana Kuala Lumpur Convention Centre Hotel, Oakwood Hotel and Concorde Hotel in Kuala Lumpur.

While offering a wide range of food for breaking of fast, hotels were also reported to have banded together to offer food for the needy.

MAH VP Micheal Quay said food kits will be distributed in seven states.

In Melaka, food kits were distributed at Bukit Rambai, Ayer Keroh, Ayer Molek, Paya Rumput and Pengkalan Batu last week.

The association collaborated with the Food Aid Foundation and Tesco Malaysia’s Tabung Kiriman Iklas in order to provide essential items such as rice, canned food, cooking oil and biscuits to the needy.