The Malaysian Insight

THE additional RM10 billion to assist small and medium enterprises (SME) deal with the economic fallout of Covid-19 is welcomed but still leaves the tourism and restaurant industries wondering if they can survive next month.

Malaysian Chinese Tourism Association president Albert Tan said while the package helps address wages and provides other subsidies as well as loan deferments, the tourism industry needs a more specific and comprehensive package.

The biggest issue confronting the sector is capital turnover, he said.

“We are all wondering if we will have enough turnover next month to pay workers’ salaries, rent, Employees’ Provident Fund (EPF) and Socso contributions,” Tan told The Malaysian Insight.

Employers are not exempted from making these statutory contributions for workers under the stimulus package. In total, the government is spending RM260 billion.

Tourism players are reeling from the effects of the Covid-19 since February after the outbreak in China led to a drastic drop in Chinese nationals travelling abroad for their spring holiday festival.

Now, there is zero business.

Tan does not expect leisure travel to pick up immediately after the movement-control order is lifted or even after the pandemic ends.

“Travellers have their own economic hardship and will consider their safety before travelling. There is no way the industry can recover in the short term, our burdens will not be for just half a year.”

He hopes the government will come up with policies that are specific for the industry, such as a special loan for tourism players.

“If we have the funds, we can tide over this half a year of crisis and then we can focus on creating tour packages that can attract more tourists after this.”

The lack of tourists also means a drastic drop in business for restaurant operators.

Like Tan, Pan-Malaysia Koo Soo Restaurants and Chefs’ Association president Wong Teu Hoon said the stimulus package was welcomed as immediate relief.

“My worry is that the government has not suspended collection of sales and services tax for the food and beverages industry. (It should do so) until next year,” Wong said.

He also doesn’t expect consumers, who are dealing with their own financial burdens, to spend at restaurants once the crisis is over.

They will choose cheaper food options and leave restaurants that collect SST in the lurch.

“Customers will be put off if restaurants continue collecting SST. I think this will affect us greatly.”

While grateful for the discount on electricity bills, Wong hoped the government would extend the 15% discount to six months as this component is one of the biggest expenses for restaurants.

“For upscale restaurants, electricity bills would be up to RM6,000 to RM7,000 at its lowest, and can go up to RM10,000. Now, there is no business at all, but operators still have to pay electricity bills to ensure that food in refrigerators do not go bad.”

He hopes the government can put itself in industry players’ shoes and consider their requests for aid.

Wong also urged property owners to adjust rental rates for food and beverage businesses.

“Some operators own their premises, but some are renting. For operators renting premises in Kuala Lumpur, the cheapest will be between RM40,000 and RM80,000 a month.

“If the lot owners refuse to lower rent, I’m afraid some restaurants won’t even last three months.”

The MCO has been in place since March 18 and is set to end on April 14.

However, the health authorities have said data on the rate of infections in the country and the ability to trace, identify and isolate Covid-19 positive cases must be studied first before deciding if the MCO should be extended. – April 8, 2020.