HOTELS BRACE UP TO WEATHER THE STORM

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By KHALID NOORSHAH
KUALA LUMPUR, Aug 14 – The Malaysian Association of Hotels (MAH) was hoping for a more direct assistance and grants rather than loan, as such loans would eventually draw businesses into deeper debt.

“However, the industry understands Government constraints when it comes to funds and the Government needs to look at overall economy and not just tourism,” said MAH’s Chief Executive Officer, Yap Lip Seng when contacted today.

MAH’s Chief Executive Officer, Yap Lip Seng
He was responding to the announcement by the Minister of Tourism, Arts and Culture, Datuk Sri Nancy Shukri who recently said that the tourism sector’s financing scheme worth RM1 billion under the National Economic Recovery Plan or Penjana is now open for applications.
“We believe the majority of our members will attempt to apply for the funds due to the attractive low interest rates,” said Yap adding that the financing will allow industry stakeholders to either fulfil loan obligations or support operations and manpower costs while awaiting economic recovery.
He said that the long awaited financing scheme is seen as a temporary solution for tourism stakeholders to weather through the storm given the current situation.
According to him, stakeholders are having difficulties managing cash flow in reopening and restarting operations given the limited sources of revenue. At the same time operators are unable to completely cease operations and risk exiting the industry permanently.
Yap said, the Covid-19 pandemic had heavily impacted everyone and not just SMEs (Small Medium Enterprises). Larger hotels and resorts had had difficulties in past months due to lack of assistance in comparison with SMEs, most were forced to take drastic actions including reducing manpower and consolidating resources for efficiency and better productivity.
“Many had also resorted to re-assigning reserves for operational purposes rather than CAPEX (capital expenditure) or reinvestments,” he added.
When asked the way forward for its members now, Yap said that the industry is generally preparing for recovery and with the commencement of domestic tourism, it also saw reasonable pick up of business at selected destinations driven by pent up demand by locals.
“Hygiene and safety are the main concerns for both travellers and operators and this involves additional costs and investments. MAH had also introduces the Clean and Safe Malaysia hygiene and safety label, benefiting hotels that are certified,” he said.
On the average occupancy rate, Yap said, MAH gathered the average occupancy of hotels in Malaysia is approximately 33% with resort and beach destinations picking up faster, and main cities and states such as Kuala Lumpur, Selangor, Johor and Sabah still low with average occupancy between 12-20%.
According to him, based on records of announcements made by the hotels, approximately 30 hotels throughout Malaysia are still close for various reasons including refurbishments and some planning to re-open by the end of the year.
MAH has approximately 1,000 members spread across 13 chapters (states) in Malaysia.

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