KUALA LUMPUR, Dec 19 — The federal government cannot expect the local tourism industry to rebuild from the estimated RM100 billion in losses due to Covid-19 this year without direct assistance, former finance minister Lim Guan Eng said today.
Commenting on the estimate that Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri disclosed to Parliament, he said the losses also did not show the full devastation of the sector that drove the economies of states such as Sabah, Selangor, Penang and Johor.
Lim, who is the DAP secretary-general, said local tourism operators must also contend with weaker domestic demand due ot the retrenchments, business closures, and salary cuts that became ubiquitous in Malaysia since the arrival of the Covid-19 pandemic.
“The tourism industry is the biggest victim of Malaysia’s triple crisis of political instability, economic recession and Covid-19 public health pandemic,” he said in a statement.
“Failure to address the triple crisis has contributed to Malaysia suffering the humiliation of being the first Asean country to have our sovereign credit ratings being downgraded by Fitch ratings agency, the first time since the 1997/98 Asian Financial Crisis.”
Despite the importance of reigniting the tourism sector, Lim said the authorities in charge of the industry have chosen to bury their heads “in the sand” with what he said were unrealistic projections of hotel occupancy rates of 61 per cent this year and 58 per cent in 2021.
Lim said such “false” projections were a disservice to the tourism industry in Malaysia as they downplayed the severity of its financial distress, which he said was clearly shown by the minister’s loss estimate of RM100 billion.
The former minister said the government should urgently consider measures to rescue the industry, such as expanding the wage subsidy scheme for the sector, automatically extending loan repayment moratoriums for tourism-related firms outside the Top 20, and offering a RM10 billion credit line to these.
“Without the above-stated urgent financial measures from the PN (Perikatan Nasional) federal government, how can the tourism sector survive the loss of RM100 billion in 2020 without any concrete tourism survival plan to compensate for its gargantuan losses?” Lim said.
According to official data, domestic tourism generated a revenue of RM103 billion for the local economy in 2019.
This all but evaporated in 2020 after the government introduced various movement control orders to stem the spread of Covid-19, which heavily restricted leisure travel and closed the country’s borders to foreign arrivals.