Hotels association: MCO 2.0 to cost struggling Malaysian hoteliers RM300m, more jobs at stake

The hospitality sector is experiencing another dip in revenue following the return of the movement control order and inter-state travel bans. — Picture by KE Ooi
The hospitality sector is experiencing another dip in revenue following the return of the movement control order and inter-state travel bans. — Picture by KE Ooi

KUALA LUMPUR, Jan 14 — Malaysian hoteliers once again face a massive loss of revenue due to the reimplementation of the movement control order (MCO).

Malaysian Associations of Hotels (MAH) chief executive officer Yap Lip Seng said the industry is expected to lose over RM300 million in revenues for every two weeks of MCO.

He said hotels had a short window of opportunity when domestic tourism was allowed from December 7 last year as occupancy rates picked up with the year-end holiday period despite the rising number of Covid-19 cases.

“With the implementation of MCO and conditional MCO countrywide, there is little hope for hotels and the tourism sector.

“Number of cases now is higher than the first MCO last year, after recording unprecedented losses for the year 2020.”

Yap said the industry is off to a rough start this year, but noted that the determining point for their survival would be in March when the wage subsidy from the government ends.

“The industry will be forced into more closures and laying off more employees with little or no improvements.

“Without higher and extended wage subsidy, the industry will collapse and more people will lose their jobs and livelihood.”

He also noted that the sector has yet to have any financial recovery since the beginning of the pandemic early last year.

“The only relief the industry experienced was during the months of July to Sept 2020 when domestic tourism was allowed, and a short two weeks in December.

“Occupancy rate overall peak was at only 43 per cent at its highest point with lower room rates by between 30 and 70 per cent on average across Malaysia.”

The pandemic cost the hotel industry in Malaysia RM6.53 billion in revenue last year. – Picture courtesy of Malaysian Associations of Hotels
The pandemic cost the hotel industry in Malaysia RM6.53 billion in revenue last year. – Picture courtesy of Malaysian Associations of Hotels

According to the MAH research and development financial chart, the hotel industry had to bear a total revenue loss of RM6.53 billion in 2020.

Although the government has allowed hotels to operate during the reintroduced MCO, Yap said the key element to generate revenue would be whether people are allowed to travel, and if they even would when they are allowed to so.

“The government needs to understand that while hotels are allowed to operate, there will be little or no revenue at all.”

Prime Minister Tan Sri Muhyiddin Yassin announced on Monday that a two-week MCO will be enforced in Selangor, Kuala Lumpur, Penang, Melaka, Johor and Sabah from January 13 to January 26.

Six others ― Pahang, Perak, Negri Sembilan, Kedah, Terengganu, and Kelantan ― have been placed under CMCO, while Perlis and Sarawak are currently in the recovery phase of the MCO.

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