Another beach resort bites the dust for RM2.7m

Due to CMCO, the entire industry is affected again, with occupancy rate likely dropping to as low as 5% says expert

by FARA AISYAH & NUR HANANI AZMAN / pic credit: sutrabeachresort.com.my

SUTRA Beach Resort, a three-star hotel in Setiu, Terengganu, is up for auction for RM2.7 million as the tourism industry continues to suffer from the Covid-19 pandemic.

According to a document sighted by The Malaysian Reserve (TMR), the public auction for the beachside hotel was held online on Oct 7, 2020.

An attached declaration of sale for the property dated Aug 11, 2020, stated that “the items will be auctioned to acquire a sum of RM36,473.12 from the defendant, excluding costs and expenses”.

The legal document is a declaration between creditor Bank Simpanan Nasional and debtor Rusli Mohd Rashid.

The 360,268.08 sq ft property — which is situated on a Malay reserve land — belongs to Dignity View Sdn Bhd.

Malaysian Association of Hotels CEO Yap Lip Seng said hotel occupancy rate throughout the country suffered when the Conditional Movement Control Order (CMCO) was implemented in Kuala Lumpur (KL), Selangor and Putrajaya, dropping to a low average occupancy of 20% only.

He said with the almost countrywide implementation, the entire industry is being affected again, and it will likely drop to as low as 5% as we have experienced during the first MCO in March.

“We never expected a V-shaped recovery for as long as a vaccine and cure is not discovered and distributed worldwide,” he told TMR.

“Initially, the industry was anticipating the commencement of tourism recovery in mid-2021. But judging by the current situation, especially in Malaysia, we will likely not see any signs of recovery till end-2021,” he added.

He said to lessen financial burdens of hotels, the government needs to direct an extension of 50% electricity and water discounts, as well as for all local governments to allocate discounts on assessments of hotel properties.

The association also hopes the government will take control of loan moratorium instead of leaving it at commercial banks’ discretion.

Last week, the government announced that the CMCO will be imposed on all states in the peninsula from Nov 9 until Dec 6, except for Perlis, Pahang and Kelantan.

The CMCO in Selangor, KL, Putrajaya and Sabah will be extended until Dec 6, too.

It has been reported that up to 20% of hotels may risk shutting down or being wound up if the restriction order remains.

In Sarawak alone, over 100 hotels have closed down or are in the middle of closing down.

Meanwhile, TMR reported in August that the auction market has been picking up, in line with the sales in primary and secondary markets, particularly for the commercial properties.

“Home buyers may not be well-versed with the residential auction properties, but for cashrich companies, when they see a commercial property below market value, this is the best time to buy,” TEN Auctioneers Sdn Bhd CEO Charles Tan said.

“We have cash-rich buyers buying residential too, but below market value commercial properties are much harder to find versus residential units,” he added.