Hard-hit hotel and tour industry hopes for more aid

The Covid-19 crisis will cause losses of up to RM60 billion in foregone tourist receipts, according to a research study.

PETALING JAYA: A new aid package for small-medium enterprises has given hope to hoteliers and travel groups of further government support measures for their ailing industry.

Representatives of the Malaysian Association of Tour and Travel Agents (Matta), Johor Tourism Association and Malaysian Association of Hotels (MAH) said there was a need for a focused package for the industry as it was one of the worst-hit by the Covid-19 crisis.

Matta president Tan Kok Liang said the tourism industry was the first to feel the economic impact of the pandemic and will be the last to recover. He said there should be more focused financial aid for the sector.

He welcomed the RM10 billion package for SMEs as many tourism companies were in that category.

However, the wage subsidy programme should be extended from three months to six as the tourism industry will take a longer period to recover.

“Matta also hopes that the government would consider allowing the private sector to stop mandatory contributions, such as EPF (Employees Provident Fund), for six months.

He said there had not been a positive response yet to this proposal.

Putrajaya should also consider deferring taxes for 2019 and 2020 for individuals and companies.

Johor Tourism Association chairman Jimmy Leong told FMT that many tourism businesses were showing signs of “near collapse”, adding that both budget and star-rated hotels were finding it difficult to sustain themselves.

He said government financial aid would lift some burden on expenses and costs, but sustaining their workforce with little to no revenue would be a major problem.

“With so much uncertainty over the horizon at this moment, a common financial step that might be taken for an entity to survive is a temporary shutdown.

“In reality, it’s a short-term and painful move as the choices for other solutions are so limited. It’s a case of no business but running its machinery without revenue,” he told FMT.

He said the sector could take between six to nine months to get back on its feet as the economic impact of the pandemic would see fewer vacationers in the short-term future, even after the movement control order.

He called on Putrajaya to waive the licensing fees for tour guides for the next two years, adding that the same could be done for travel and hotel companies.

MAH echoed calls for a special package tailored for the tourism industry, adding that occupancy rates are not expected to improve for another six months.

He said a generic stimulus package that caters to all would be insufficient to keep the tourism industry afloat, adding that MAH had previously submitted proposals to the finance minister specific to the industry.

This included a wage subsidy of RM1,000 for each worker earning less than RM5,000 and a six-month 30% subsidy for employees earning between RM4,000 to RM8,000.

“These are not being considered or touched in this Prihatin Tambahan announcement and we are guessing that there will be another just for tourism,” he said.

Research firm Affin Hwang Capital had previously warned that the tourism sector could lose RM50 billion to RM60 billion in tourist receipts this year due to the Covid-19 crisis.

It said this was based on the assumption that the crisis could lead to a 60% decline in tourist arrivals, adding that low tourist receipts would lower the nation’s private consumption and economic growth.