15 per cent of hotels in Malaysia may have to shut down operations

By TIN Media | Hospitality Published 8 months ago on 27 April 2020
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The Covid-19 pandemic may force approximately 15 per cent of the hotels in Malaysia to close their operations .

Malaysian Association of Hotels (MAH) chief executive officer Yap Lip Seng said this finding was based on a survey conducted by the association on April 16.

He said "From the same survey, 50 per cent of the hotels responded that they are considering ceasing operations and 35 per cent of hoteliers said they would temporary halt their businesses.

"Some hotel operators said they would remain closed at least till year end, while some said they would only resume their businesses after a vaccine for Covid-19 is found," he added.

A total of 4,880 hotels, including budget hotels, in the country are registered with the Tourism, Arts and Culture Ministry.

Although hotel services are part of the essential services that are allowed to operate during the Movement Control Order (MCO), hotels are prohibited from accepting new guests, and they can only provide services to those who had already checked-in into the hotel before March 18.

Food and beverage services are to be limited to room service only, and all other facilities and services of the hotel should remain closed.

Yap said the closure was also partly due to the "close to oversupply" market in the country.

"Looking at the data, Malaysia is already close to oversupply in terms of hotel rooms. That is further worsened with unregulated and uncontrolled homes which are turned into tourist accommodation that does not contribute taxes to the country. With the downturn in tourism demand, supply needs to be adjusted," he added.

Asked when would the closure begin to take place, Yap said it would probably happen in the coming weeks.

"We do not know at the moment. Majority of the hotel owners and operators initially were on a 'wait & see' strategy, not knowing how long the MCO and the situation will last.

"Now that the MCO period is extended, many hotels may be forced to decide on the final outcome in the next couple of weeks," he said.

Although he acknowledged that the MCO extension would mean that hotel operators bear more losses and push back the recovery of the industry, he expressed his confidence that the Health Ministry was doing its best to stop the spread of Covid-19 in Malaysia.

He said MAH was expecting a slow recovery for the hotel industry, adding that hotel operators would be focusing on domestic tourism, once the MCO was lifted.

"Tourism is not going to be the same (after this), including the aviation sector, that is facing with an uphill task of battling perception post Covid-19.

"We expect a slow recovery as we will not experience the same volume (of tourists) anytime soon. We foresee the industry to recover by middle of next year."



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