In light of the recent announcement of the Movement Control Order (MCO) and the grim outlook for travel this year, the Malaysian Association of Tour and Travel Agents (MATTA) urged the government to be proactive and come up with an improved and tailored rescue plan for tour and travel agents.
Datuk Tan Kok Liang, president of MATTA, said tourism companies are currently in serious distress because of the very fragile and unstable market climate that is expected to continue late into 2021.
"Since the start of the [Covid-19] pandemic, tour and travel agents have been struggling with collapsing revenue and liquidity issues, and the government's efforts have not had any significant impact on this segment of the industry," he said.
Tan pointed out that tour and travel agencies are important to the economy of Malaysia as most of these companies contribute significantly to inbound traffic in the form of both leisure and business travelers to Malaysia.
He added that many agencies also provide essential logistics services and maintain fleets of buses and other tourist vehicles that are vital to the country's tourism infrastructure.
He noted that tourism also plays an important role in contributing to gross domestic product (GDP) at the national level, and that it has been the third largest contributor in recent years.
The industry generated 14.1% (RM166 billion) of the country's GDP in 2015, 14.5% (RM182 billion) in 2016, 14.6% (RM201 billion) in 2017, 15.2% (RM220 billion) in 2018 and 15.9% (RM240 billion) in 2019, according to Tan.
"The Covid-19 pandemic had a major impact on the tourism industry in 2020, with an estimated total loss of over RM100 billion," he said.
While the hotel industry expects more hotels to close or wind up due to the second phase of the MCO and the continuous closing of borders, he said that more travel agents are very likely to face the same fate as hoteliers, especially those owning tourism vehicles.
Tourism companies are likely to experience further losses, and the government must allow for an extension of the moratorium on loans and enhanced wage subsidy programs until 30 June 2021.'
"Rental, insurance and statutory licensing fees relief is also required to help those affected, particularly SMEs who have already had to burn a lot of money just to survive the last MCO," he said.
MATTA also encourages travel companies to shift towards restructuring and mergers.
More than 5,000 travel companies are now in 'ICU' (intensive care unit) status, according to the organization, and as the situation gets worse, the government needs to implement rehabilitation services.
"It would be a good gesture of support to allow travel agents to close business premises and operate from home and to cancel the mandatory Travel and Tours Enhancement Course (TTEC) for travel companies," said Tan.
MATTA also urged travel agency employees to reskill during this difficult period, although the association was disappointed that, apart from the 8,000 aviation workers as stated in Budget 2021, the government did not allocate funds for reskilling tourism workers in general.
It is also important for the government to address the problems of deposits kept by airlines and related service providers, to make urgent corrections to the [outdated] Tourism Industry Act 1992 and to provide flexibility for the approval of the conversion of tour buses into other categories in order to enable these buses to be used for other purposes.
He also noted that the tourism industry was burdened by bureaucracy and over-governance that affected the regional and global competitiveness of the industry.
He added that overlapping jurisdictions of different government entities have stifled the industry for several years.
"Under the Covid-19 pandemic, it is no longer "business as normal" and we urge the various government agencies to make immediate policy changes to ease the financial burden of Malaysia's hardest-hit industry," Tan concluded.
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