Hotels association: CMCO to cost hoteliers up to RM100m, no recovery in sight until end 2021

The hospitality sector is experiencing another dip in revenue following the return of the conditional movement control order. — Picture by KE Ooi
The hospitality sector is experiencing another dip in revenue following the return of the conditional movement control order. — Picture by KE Ooi

KUALA LUMPUR, Oct 15 — Hotels in Malaysia are once again experiencing booking cancellations due to the reimplementation of the conditional movement control order (CMCO) in Selangor, Kuala Lumpur, Putrajaya and Klang. 

Although only four peninsular states and territories are affected by the two-week CMCO, Malaysian Association of Hotels chief executive officer Yap Lip Seng said they have recorded up to 15 per cent occupancy drop immediately after the country was hit with another wave of Covid-19 infection. 

“The major impact is on overall domestic tourism, and with the increase in cases since October 1, we saw immediate reactions from the market with popular destinations receiving cancellations for both room reservations as well as events. 

“The spike in cases had generally raised concerns throughout [the country] regardless of locations.”

Yap noted that they anticipate a drop of up to 15 per cent in occupancy rate over the next few weeks. 

“(It may) even be more now that Kuala Lumpur, Selangor and Putrajaya — which are a major source of the domestic tourists market — are placed under CMCO.

“This would at least cost the industry between RM60-100 million in revenue, and if the situation doesn’t improve, we will be forced back to the early days of the pandemic with more restrictions on movements including tourism, which would push the recovery further.” 

Yap said they had expected to enter a recovery period for the tourism sector in the middle of 2021, however due to the current situation he said it will likely be by end of next year. 

The hospitality industry has been one of the badly affected sectors ever since the pandemic caused widespread travel ban and movement restrictions globally. 

Following the enforcement of MCO in March this year, the sector saw a drastic dip in occupancy and revenue rates, with an estimated loss of over RM3.3 billion in room revenue alone from January until June. 

The prolonged pandemic and economic hardship also forced many established hotels to shutter either temporarily or permanently. 

As a result, thousands of hotel workers were forced out of jobs or had to bear with steep salary cuts for months.

Related Articles