The Malaysian Insight

THERE is great demand from the hospitality sector for the government to give them a lift to save the industry that has been on the snooze button since the movement-control order (MCO) was imposed in March.

While they are supportive of the health and safety measures that have been implemented to curb Covid-19, they are also hopeful for action to restart the tourism sector that Malaysia was once robust in.

These players have recommended regulated travel bubbles, the distribution of travel vouchers and rebates, as well as travel promotion and education as part of efforts to revive the sector.

Ormond Group chief executive Gareth Lim said Malaysia offers many compelling reasons for tourists to visit and spend their money here.

“There is a pent-up demand for safe travel bubbles to be set up with our regional neighbours. The prolonged depressed demand has also seen many hotels shutter,” he told The Malaysian Insight.

Ormond Group, which owns Ormond Hotels, MoMo’s and Tune, experienced a blow in business contending with the various punches from Covid-19, such as the extended closure of borders.

Even during the recovery MCO, they faced lumpy demand. Currently, hoteliers and home-sharing hosts are heavily reliant on regional business.

“Efforts to establish green travel corridors and bubbles are much needed to restart international tourism, an essential part of the industry,” said Malaysian Association of Hotels (MAH) CEO Yap Lip Seng, who acknowledged that the government is working on it.

MAH is running awareness campaigns to encourage domestic travel, one of which is supporting the public to take advantage of the personal income tax relief of up to RM1,000 for 2020 and 2021.

The public can also take advantage of the SST exemption for hotels till June 2021.

Chief financial officer from Victoria Home, a short-term rental and homestay management service, Wong Chea Hao, said opportunities in cross-state travels are not fully unlocked.

“In the past, international travels are much more favoured by Malaysians, largely owing to the strong travel enablers by the leading regional low-cost carrier headquartered and based in Malaysia.

“Practically, it makes not much of a difference to travel to Sabah than to Thailand in terms of cost. As for the current season, we hope to see more efforts from the government to reintroduce and strengthen Cuti-Cuti Malaysia, which is a strong slogan that went deep into every Malaysian’s heart.”

Due to the forced change of outbound travels to domestic travels, Victoria Home vouched for government initiatives to push for the ewallet usage and tax rebate for domestic travels.

Travel vouchers

Grace How, a homestay host, said the government could give incentives to companies for travel for employees.

“The government can partner with local hoteliers and guesthouse owners, and send full-fledged vouchers with travel packages and food coupons. The government could also make it compulsory for employers to not restrict employees in applying leaves to utilise those vouchers,” How said.

She added that this may also improve employees’ mental wellbeing while helping the tourism sector. Currently, she is teaching part-time to withstand financial challenges.

“It has been zero business because I highly depend on AIESEC (an international youth-run, civil society for youth leadership development) exchangers from overseas, by a batch of 5-10 pax.

“My business structure is a dormitory-style hostel, it may be the last thing in travellers’ mind to co-live in a dorm,” How said.

Some homestay hosts are thankful that they are not as affected by the pandemic as they expected to be.

“Business has resumed back to normal. The occupancy rate has not been affected, which is around 80%, since after opening up my Airbnb again during RMCO.

“In terms of profit-making, this apartment was refinanced, therefore the loan is too much for the Airbnb profits to cover. But as an Airbnb, it still earns about 40% more than if I had rented it out.

“Many other customers are relatives of the residents of the apartment, which my Airbnb is located at,” said Adam Chee, a 22-year-old fresh graduate who is helping his family to rent out the property.

Another Airbnb host, Angeline Tan, 31, said she was blessed that a guest decided to extend the stay for a period of one month when MCO was implemented.

Her home in Nilai Mesahill now has about seven or eight customers in a month, which is 50% of the pre-MCO booking rate. She is looking forward to further recovery.

For ideas on boosting the travel economy, Angeline said the government could locate and implement travel subsidies at travel areas which have lesser crowds to motivate flow.

Lower spending power

While there might still be travellers, there are also concerns on prices for rental rates.

“Now, 100% of customers are from the local market. Because of that, there is hardly any chance to charge premium prices even for quality units.

“The spending power from local tourists is not as high as international tourists,” said Erik Yean, 33, who manages 30 Airbnb homes near KLIA.

Tiong Wen Ni, 34, who manages an apartment Kuching city centre through Airbnb and Booking.com, said the price war has started because the pandemic affected most hotels and other homestay operators.

“The rental fees of similar property and room size are so competitive that the income is not sustainable.”

Though her business was greatly impacted by the pandemic, she believes that there is opportunity in the chaos. Tiong said Malaysia has many tourist attractions ready and just need the right promotion.

“With better management, I think we can do better than Singapore because we are cheaper with a variety of nature places and cuisines. We are also much safer than Indonesia with a lower number of Covid-19 cases,” she said.

Some of the ways Tiong suggested that the country can enhance its images is political stability, national unity and having a fair and transparent government.

“Government must be fair to every sector. For example, in Thailand and New Zealand, they do not side with big corporations either hotels or travel agencies, because everyone plays a role to revive the tourism industry,” Tiong said.

Lim from Ormond Hotel reminded the government to remember the tourism industry.

“Whilst initiatives have rightfully focused on SMEs, many hospitality players are listed companies and they too are not spared from the Covid-19 pain.

“By definition, however, they are not able to benefit from some of the initiatives put in play by the government and it may be useful to extend these to all hospitality providers.”

Employers are struggling to retain manpower and are forced to take drastic cost management measures. The hotels are still in survival mode, operating on lower yields purely to sustain and retain employees.

Hotelier and homestay services alike are longing for initiatives to help the hospitality industry better weather the storm. – September 30, 2020.