The Malaysian Association of Tour and Travel Agents (MATTA) has urged the government and Bank Negara Malaysia (BNM) to extend the loan repayment moratorium by another six months for the tourism industry.
In March, BNM had granted a six-month moratorium on loan repayments starting April 1 to help ease the financial burden of individuals and SMEs affected by the Covid-19 pandemic.
MATTA president, Tan Kok Liang, said in a statement that the extension of the loan moratorium will help more tourism players to weather through the challenges. He added: “The tour and travel industry is the hardest hit by the recent outbreak and studies indicate that it will only recover from the current crisis much slower than other sectors of the Malaysian economy.
“It will be an uphill task to retune the industry if tourism companies are wounded up and tourism workers are being driven into bankruptcy by early 2021.”
Tan shared that many tourism players have had no income since March, and that against a backdrop of recession and unemployment, being wholly dependent on domestic tourism will not be sufficient to sustain related businesses and individuals working in this industry.
He said: “The industry’s inability to service their loans are due to regulatory constraints and weak demand. As many tourism businesses derive a large portion of their earnings from international tourists, how are they to survive if borders stay closed?
“With no firm direction from the government on the easing of borders, it is only appropriate to request that the government initiate and order an extension of the moratorium, rather than industry players seeking an extension to their respective banks on their own, which will likely be turned down, especially after the prime minister (Muhyiddin Yassin) made an announcement that the industry could take four years to recover.
“Individual borrowers working in the hospitality and tourism industry should also be given a six-month moratorium extension as many are currently on pay cuts, unpaid leave or have been retrenched. Many do not have the ability to repay their loans under current pressing circumstances and the rate of unemployment is rapidly increasing.”
The Ministry of Tourism, Arts and Culture estimated the losses suffered by the tourism and culture industry totalled some RM45 billion (US$10.5 billion) in tourism receipts, and about one million workers in the tourism industry in Malaysia are expected to lose their jobs this year, said Tan.
He added: “The tourism industry’s collective inability to service its debts is due to external forces beyond its control. In this instance, the industry urges the government to take proactive actions to intervene rather than leave the decision to the various private banking institutions who will make decisions based on their terms of industry risk assessment and maximise shareholders wealth.”