The Malaysian Insight

WHILE some tour operators have developed new and cheaper packages for domestic tourists to survive the Covid-19 pandemic, others who are struggling have to sell assets, such as vehicles, to cut their losses.

Even though domestic tourism was allowed to resume in early May following the lockdown imposed to combat Covid-19, it is nowhere near the same levels before the movement-control order (MCO) imposed in mid-March.

Smaller tourism players, who once employed a handful or workers, are themselves now working as lorry, bus and taxi drivers to support their families.

Kedah-based operator Ahmad Ruslan Abdul Latiff told The Malaysian Insight he could no longer sustain his business and wanted to sell his 10-year-old company after eight months of zero income.

Ruslan’s company operates sightseeing tours from Kulim, Kedah.

“My last income was in December 2019. We made the last trip that month and paid the employees’ salaries for January 2020.

“Since then, this company has no direct income, leaving me no choice but to sell the company,” said Ruslan, who now works as a lorry driver.

He tried offering cheaper domestic travel packages in May, when the government allowed interstate travel and domestic tourism to resume, but these were poorly received.

“I feel sad to have to leave this business, but if there is no income even if try hardest, then it is better for me to sell it to cover the family expenses,” said the father of four.

M. Thiruppathy, a travel agency operator in Bentong, Pahang, is selling a tour bus to salvage his company.

“I don’t want to shut down the company, I want to sell a bus first to raise some capital,” he told The Malaysian Insight.

“As long as the government does not open our border to foreign tourists, we will have difficulties. Companies like mine bring in tourists from abroad.”

Thiruppathy said local tourists are not enticed by the cheaper domestic packages.

“Locals just prefer to use their own car rather than take a sightseeing bus.

“We can only get one fifth of the customers we had before Covid-19. And we had to offer such cheap packages, it was almost like doing charity.”

Thiruppathy is now worried about the future, as he knows little about other businesses since most of his work experience has been in tourism.

“It’s also not easy to start another business in this climate.”

Tough decisions

Penang-based outbound tours operator Ismail Jusoh is also thinking about shuttering the business.

“In the early days of the MCO, I was able to pay only half the salaries owed to 10 employees.

“Now I’ve closed down the office as I cannot afford the rent. And all my workers have left and found new jobs.

“A part of me still wants to keep the business going, but I am afraid there will be no business at all.”

Ismail is mulling whether he can continue to keep his company going by scaling down operators. He used to handle 30 to 40 outbound tourists to foreign destinations per trip and now wonders if he can survive financially with fewer trips.

“I also still have my licence, which only expires in 2022.”

Last week, Tourism, Arts, and Culture Minister Nancy Shukri announced the details of the tourism sector financing scheme under the National Economic Generation Plan (Generator) worth RM1 billion, which is now open for applications.

The scheme aims to rehabilitate small and medium enterprises (SMEs) in the tourism sector which are affected by the Covid-19 pandemic.

Under the scheme, those who are eligible can apply for a loan of between RM75,000 and RM300,000 with a financing rate of not more than 3.5% per annum for up to seven years. Those eligible are also given the facility to defer the repayment of the loan for up to six months to help with cash flow.

Among those eligible to receive assistance are budget hotel and homestay operators, chalets, and resorts, travel agencies as well as tour operators, such as buses, boats and rental cars. – August 6, 2020.