Malaysian hoteliers brace for further fallout from lockdown extension

Malaysia has extended its existing 14-day nationwide movement control order (MCO) from March 31 to April 14, as the number of coronavirus infections have yet to be reduced.

The two-week extension, which was announced by Malaysia’s prime minister Muhyiddin Yassin yesterday (March 25), may be a bitter pill to swallow for the travel trade but a necessary measure to stem the spread of Covid-19.

Malaysia extends national lockdown by two weeks

As of March 25, 22.00, the number of Covid-19 cases in Malaysia rose by 172 to hit 1,796, with a death toll of 20.

KL Tan, president of the Malaysian Association of Tour and Travel Agents (MATTA), opined that the MCO’s extension will not have much further impact on the travel and tourism industry, which is already severely battered.

He shared: “There is little business for tourism players, particularly those in inbound, as tourists from traditional markets may not be able to travel as their countries are under lockdown or airlines have cancelled flights.

“Our main focus should be on battling the outbreak. It is better to get rid of the coronavirus totally than lifting the MCO prematurely and reintroducing the virus.”

Commenting on the impact of the MCO’s extension, Malaysian Association of Hotels (MAH) CEO, Yap Lip Seng, shared: “Our estimates, based on historical data, showed at least a RM560 million (US$127.3 million) loss in (hotel) business just for the first 14 days of MCO (from March 18 to 31).

“An extension (of the MCO) for another 14 days would mean over RM1 billion in losses for the industry. According to our survey, the MCO – on top of losses caused by the outbreak of Covid-19 in general – are forcing employers to impose pay cuts and asking staff to take unpaid leave, and some are even laying off employees.

“As of now, approximately nine per cent of employees in the hotel industry are taking a pay cut, while 17 per cent have been put on unpaid leave, and four per cent laid off.”

Frangipani Langkawi Resort & Spa will be offering full refunds to guests who have booked their stays from April 1 to 14.

To further cut costs, managing director Anthony Wong said senior staff may be asked to take two days off every week during the MCO period.

Meanwhile, MAH has proposed a series of financial initiatives to the government, which entails looking beyond moratorium of loans as it does nothing to lessen the burden on businesses and individuals, and they may even end up with higher debts due to accumulated and extended interests.

Yap stressed: “We need the government to instruct banks to waive interests temporarily to help sustain businesses.”

Among the proposed initiatives are for an additional economic stimulus package which includes increasing electricity discounts from 15 per cent to 30 per cent from April 1 to September 30; a minimum reduction of five per cent of employers’ contribution to the Employment Provident Fund up to December 2020; as well as a RM800 monthly subsidy for employees with a monthly wage of RM4,000 or less up to December 2020.

A new and comprehensive economic stimulus package, which has been described as a “people-caring” one, will be tabled tomorrow.

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