Hard times ahead for budget hotels with 15% already closed down

Budget hotels expect business to pick up only at the end of the year.

PETALING JAYA: Budget hotels are facing an economic crunch with 15% shut down so far and more expected to join the list if the movement control order (MCO) is extended beyond its latest target date of May 12.

Emmy Suraya Hussein, president of the Budget Hotel Association, said many operators had decided to close down as they were unable to sustain their overheads.

“Those with two or three hotel chains are shutting down their branches to focus on the ones that were making money before the MCO,” she told FMT.

Even so, she said, they do not expect business to resume immediately after the MCO is lifted as other rules on hotel occupancy may be introduced to curb the transmission of Covid-19.

For example, she said, hotels might only be allowed to lodge 10% of their normal guests to ensure the practice of social distancing.

She added that it might take months before Malaysians regain the confidence to travel.

She said the association expects business to begin picking up only in November or December.

“That is if the number of cases keeps coming down,” she added.

Emmy said budget hotels in smaller towns might fail altogether as they depend on tourists for their numbers. However, she said hotels near beaches might do better as people would probably prefer to be outdoors after spending weeks isolated at home.

As for budget hotel staff, she said the government is providing them wages of RM1,200 for three months.

“If that could be extended to six months, it would be good as our recovery will take several months.”

There are about 8,000 registered budget hotels in the country.

The MCO, implemented on March 18, was originally scheduled to be lifted at the end of the month. However, it was subsequently extended to April 14 and again to April 28. It was most recently pushed to May 12 as the authorities continue efforts to contain the spread of the virus.

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