Tourism business bracing for another collapse

The industry is not expecting any improvements and instead anticipating 2021 to be worse than 2020


THE tourism and travel industry is anticipating another devastating decline, following the extension of the Conditional Movement Control Order (CMCO) in several states until March 31, which also disallows interstate travel.

The Malaysian Hotels Association (MAH) has already reported the closure of over 100 hotels, either temporarily or permanently, all over the country since the inception of the first MCO last year.

MAH president Datuk N Subramaniam said the introduction of MCO 2.0 in early January had also forced quite several hotel operators to make the same difficult decision.

“With the first quarter as good as gone and no signs of international tourism at least till 2022, the industry is not expecting any improvements and instead anticipating 2021 to be worse than 2020,” he told The Malaysian Reserve (TMR).

He said judging from the historical data for 2020, the industry saw an increase in arrivals, occupancy and spending for January, followed by a sharp decline in February due to China’s closure of its own borders at the end of January 2020.

“Nevertheless, January was in general higher than the year before, and that was the main contributing factor for the entire year of 2020. In comparison, 2021 commenced with MCO 2.0, while international borders and travel are still restricted,” he said.

Selangor, Kuala Lumpur, Johor, Penang, Kelantan and Sarawak remain under CMCO as the number of new cases remains high and most of the districts in these states are categorised as either red or yellow zone.

As for the concept of allowing interstate travel between states that are placed under the Recovery MCO (RMCO) via travel agencies, Subramaniam said the implementation might have its limitations, but it is a significant indication that the government has the industry’s views in mind.

He said that MAH appreciates all the efforts that are undertaken by the Ministry of Tourism, Arts & Culture (Motac) in pushing for the proposed relaxation of all the travel restrictions and regulations.

He added that the industry players are hopeful that Motac and the government will take the steps further as the country anticipates a lower number of cases in the coming days.

“The industry also understands the concern of control over deviations of travel with private vehicles and is proposing for the government to allow travel between RMCO states via flights with confirmed hotel bookings.

“Hotels are ready with its standard operating procedures (SOPs), especially those certified ‘clean and safe’, MAH’s very own hygiene and safety label supported by Motac,” he said.

According to Malaysia’s Business and Economic Conditions Survey conducted by The Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM), tourism-related business prospects are expected to remain weak in 2021 amid the ongoing vaccination programme.

The survey reveals that more than 50% of respondents in the tourism-related sector would be unlikely to survive if the CMCO or Enhanced MCO is in place for more than one to two months.

“While the movement restrictions are less restrictive, it is expected that the scarring effects will continue in the first quarter of 2021, in particular for the travel and tourism-related sectors,” a statement by ACCCIM read.

Malaysian Association of Tour and Travel Agents president Datuk Tan Kok Liang said industry players are no longer able to sustain their businesses due to prolonged travel restrictions.

“I don’t think small and medium enterprises can hold on any longer without targeted assistance to the travel and tourism industry.

“So far, about 90% of travel agencies nationwide had remained inactive and hibernating this year,” he told TMR.

Tan said with the first anniversary of the MCO, it is time to move forward by balancing lives with a livelihood.

“Malaysians need to be more responsible and compliant in our fight against the pandemic by observing the SOPs.

“We hope the government will ease travel restrictions and only implement MCO on red zone areas. We also wish for more funding on the domestic tourism stimulus package to boost travel,” he added.

Meanwhile, Bumiputera Retailers Organisation president Datuk Ameer Ali Mydin is bullish on the retail segment’s prospects for this year and believes the objective of the CMCO’s extension is also meant to mend the economy.

He said the number of Covid-19 cases needs to be further curtailed so that people will be more comfortable shopping, dining out and buy groceries.

“At the moment, sales and footfall for the retail sector in Klang Valley have gone back to 60% pre-pandemic level. With more people vaccinated day by day, we hope that the government can allow interstate travel soon.

“With the fasting month beginning in April, followed by Hari Raya Aidilfitri, it is a good timing for businesses,” he told TMR.

He also suggested the implementation of a relevant amount of compound suitable with the type of offences, rather than discount’s offer.

“By offering a discount, it looks like the government is doing a business, which is not right. In the first place, RM10,000 is a huge amount.

“The government should charge a lower compound for offences like no social distancing and not wearing a face mask. A higher amount can be charged to owners of and visitors to entertainment centres who continue to flout the regulation,” he said.

Read our previous report here

Businesses remain wary of recovery this year