The Malaysian Insight

FORGET Visit Malaysia 2020 (VM2020) for now as the tourism industry is bearing the brunt of the coronavirus outbreak in China, which has caused the cancellation of at least 5,000 tour group bookings, said industry players.

They told The Malaysian Insight that they have been left in the lurch as the hotel and restaurant bookings are worth RM400 million.

Some hotels have allowed tour groups to reschedule, while others have given them a grace period of up to two months to pay for the bookings. However, that is not the case for restaurants, which do not offer refunds.

Most of the cancellations involve tour groups from China, for the January-March period.

Putrajaya has targeted 30 million tourist arrivals, including four million from China alone, this year under the VM2020 campaign.

Tourism industry players, who are trying to minimise their losses, have appealed to the government to instruct banks to expedite loans by tour operators and stop collecting tourism-related taxes until the virus crisis is over.

The outbreak began in the Chinese city of Wuhan six weeks ago, and has infected more than 34,000 people and killed at least 722, most of them in China. Malaysia has registered 16 cases of infection.

Malaysia Inbound Chinese Association president Angie Ng said the tourism sector is bearing the brunt of the outbreak, with the crisis triggering a domino effect that impacts tour companies, airlines, tour bus firms, hotels, the food and beverage sector, money changers, medical tourism and even street traders.

She said the cancellation of 5,000 tour group bookings has poured the money paid for hotels and restaurants down the drain.

“Not all restaurants were open during Chinese New Year, and those that have accepted bookings for tour groups have already made the necessary preparations according to the number of people, and hotels have been booked, too.

“Tour groups have to pay upfront for all these bookings. Hotels can refund the money, but restaurants cannot do so as all the food purchased will go bad.”

She said some hotels have been understanding of the issues faced by tour companies and allowed them to reschedule bookings.

Some smaller hotels have also allowed a two-month grace period for payment as tour groups are facing serious cash-flow problems due to the cancellations.

Ng hopes the Finance Ministry will announce a stimulus plan for the tourism sector soon, and asked that the ministry instruct banks to expedite loans by tour and tour bus operators.

“I also suggest that the government temporarily stop collecting tourism-related taxes until industry players can tide over this crisis.”

Exploring other markets

Malaysia Inbound Tourism Association data showed that in the five days between January 25 and 29, up to 80% of tours were cancelled, with some 2,000 association members affected.

Ng said tour groups are now working to bring in more visitors from Hong Kong, Macau, Vietnam, India and Singapore.

They are also encouraging local tourists to hire tour buses or purchase local tours.

Ng said losses in the tourism sector during the 2002-03 SARS, or severe acute respiratory syndrome, epidemic were limited because authorities were slow to respond and only stopped travels two or three weeks after the outbreak.

“The travel bans came into effect early for the Wuhan virus outbreak this time and tourism players were caught off-guard, leading to heavy losses.”

Malaysian Association of Tour and Travel Agents chairman Tan Kok Liang hopes the outbreak will be brought under control in the next two to three months, to minimise its impact on tourism.

If this is the case, he said, tourism industry players can still achieve the objectives of VM2020.

Anticipating a drop in Chinese tourist numbers, he has started exploring other markets, such as Southeast Asian countries, India and local tourists, with discussions ongoing with national and state tourism departments.

He added that Malaysia’s tourism industry is resilient, pointing to how it thrived despite the SARS crisis and MERS, or Middle East respiratory syndrome, outbreak in 2012. – February 9, 2020.