Malaysia travel trade decry Budget 2021 as insufficient and biased

Malaysia’s Budget 2021, tabled on November 6, has drawn criticism from travel and tourism industry leaders for failing to provide strong relief to safeguard jobs and businesses as well as for directing greater job assistance to the aviation sector over others in the industry.

Malaysian Association of Tour & Travel Agents (MATTA) president, KL Tan, said the budget would do little to help the tourism sector on its road to recovery.

Budget 2021 does not provide sufficient assistance to small and medium-sized tourism businesses and workers, lamented industry leaders; Ipoh’s popular Concubine Lane pictured

He accused Budget 2021 of neglecting the welfare of 3.6 million workers in the field and small and medium-sized tourism companies.

“The allocation of RM50 million (US$12.2 million) for maintenance works and overhaul of tourism facilities are not enough to improve tourism products,” Tan added, warning that the “next 12 months is bleak” and the industry risks drastic contraction “without the right support”.

Tan opined that the government should have also allocated funding for re-skilling and training programmes accessible to all in the tourism industry, and not just the aviation sector.

Budget 2021 will direct RM50 million to re-skilling and deployment programmes for 8,000 of airline employees that were retrenched this year.

Tan, expressed: “MATTA views this support as unfair and biased to only one sector, the airlines, (when the tourism industry comprises also) travel agents/tour operators, hotels, land transportation, F&B operators, shopping, and others that employ more than 3.6 million people and contributes 15 per cent to the national GDP.”

He revealed that the country’s 5,000 travel companies had to lay off five employees on average, amounting to at least 25,000 workers being left without income during this pandemic.

“The Minister of Tourism, Arts and Culture had quoted that near to one million people working in the tourism industry will lose their jobs,” he added, urging the government to “give due and urgent consideration and sufficient allocation to this vulnerable industry that has to face the brunt of the Covid-19 pandemic”.

Yap Lip Seng, CEO, Malaysian Association of Hotels, also lamented the limited reach of Budget 2021, expressing disappointment with the continued insufficient wage support of RM600 per employee per month.

“The industry had repeatedly urged the government to consider a higher amount based on percentage, 50 per cent for employees with wages up to RM4,000 per month and 30 per cent for employees earning RM4,001 to RM8,000. This model is adopted in many countries to support the industry and to protect jobs of the people.”

Yap highlighted the need for higher cash assistance to businesses and correction for the inefficient implementation of loan moratorium, which is at the discretion of financial institutions and commercial banks.

A recent survey conducted by the Malaysian Association of Hotels reported an immediate drop in hotel occupancy with the September spike in Covid-19 cases. Overall occupancy dipped to 35 per cent on the first week of October, 30 per cent the second week, and eventually only 20 per cent on the last week of the month.

“The government needs to acknowledge these indicators and that the industry is in need of more assistance,” stressed Yap.

He said while the industry is grateful that the government is extending direct assistance to displaced airline employees, the government also needs to look at the situation in entirety where airlines, an essential stakeholder of the tourism industry, must also be protected.

“Malaysia cannot afford…anymore closures in the tourism industry; she risks even higher cost of rebuilding the industry and losing tourism capacity leading to loss of revenue in the long run,” he said.

Malaysia Budget Hotel Association deputy president, Sri Ganesh Michiel, said it is critical that the government extend the loan moratorium and wage subsidy programme up to June 2021 for the hard-hit hotel and tourism industry, and provide more tax reliefs for both industry players and domestic tourists.

Tan Ming Luk, country head for OYO Malaysia, also expressed his disappointment that there were no allocation to further stimulate domestic tourism in 2021.

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