Another 5-star hotel to close due to Covid-19 crisis

In a circular to staff, the hotel says the MCO had badly affected it and workers will be paid termination benefits. (Reuters pic)

PETALING JAYA: A five-star hotel in Melaka has decided to shut down indefinitely, the second such hotel reported to be doing so, saying it was no longer “viable” to continue operations in light of the Covid-19 crisis.

According to a circular sighted by FMT, addressed to the hotel’s union by the owners, the hotel will shut down on June 30.

It said the pandemic and the subsequent movement control order (MCO) had severely impacted the hospitality industry and the hotel “was no exception”.

“As a result of the crisis, the continued operation of the hotel is no longer viable.

“It is with sincere regret that we wish to inform that the owners have now decided to close the business of the hotel indefinitely,” the circular read.

The owners said it will serve two months’ termination notice to its employees.

The hotel will also be paying employees the “termination benefits as per their contracts of employment”.

Meanwhile, an executive from another hotel based in Melaka, who spoke on the condition of anonymity said news of this particular hotel’s closure had been circulating for the past two weeks.

The source said that an employee with the said hotel had confirmed the matter with members of the Malaysian Association of Hotels (MAH).

The source also said that a few more hotels in the state might also suffer a similar fate and “temporarily close for a few months”.

Yesterday, FMT reported that a 500-room 5-star hotel in the Klang Valley is preparing to halt operations until the end of the year.

A leaked memo to employees of the sprawling hotel told them to take unpaid leave throughout the closure.

Permanent staff were also assured of their jobs if the hotel resumed operations. It is understood that employees will receive half month’s salary for April.

G City Club Hotel near KLCC also closing

Meanwhile, G City Club Hotel Sdn Bhd also announced its closure after a decade of operations, citing low occupancy suffered in the past few years from increased competition from new hotels and the proliferation of homestays in the KLCC vicinity.

Prolonged roadworks and MRT works in the KLCC vicinity had also created accessibility problems in the Jalan Tun Razak area, resulting in much lower occupancy from leisure travellers.

This, it said, was compounded by the Covid-9 crisis and forecasts that it would take 18 months for the global economy, and low travel confidence to be normalised.

“The management reviewed its hotel operations and is making the difficult but needed decision to cease operations,” it said in a statement.

“This is a tremendously sad day for the hotel and our 79 employees,” it said, adding that adequate notice will be given while wages and employment termination benefits will be paid.


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