Checking out, for good: Hotels in Malaysia in crisis mode

As Malaysia’s hotels shut down, hospitality workers find themselves out of work.

By Jeremiah Capacillo

The Ramada Plaza in Malacca is among the bigger calamities of the Covid-19 pandemic

With the Covid-19 pandemic raging on and potential tourists remain shackled to their home countries, a number of hotels in Malaysia found themselves in the position of having to close up for good. A survey from the Malaysian Association of Hotels finds that 15 per cent of hotels in the country, or approximately 700 hotels, are projected to shut down permanently in 2020.

Out of the 324 hotels questioned in the survey, 50 per cent responded that they are considering ceasing operations permanently, and 35 per cent said they would temporarily halt their businesses to recoup their losses. Some hotels said they would remain closed at least until the end of the year, while others said they would only resume their businesses after a vaccine for Covid-19 is found.

Although hotels are allowed to operate under Malaysia’s movement control order, they are prohibited from accepting new guests and can only entertain guests who have checked-in before March 18. Sadly, this endangers the livelihoods of thousands of hospitality workers.

A tourism drought

Stringent international travel restrictions are severely impacting the country’s tourism industry. 4,233,425 foreign tourists visited Malaysia in the first quarter of 2020, a 36.8 per cent decrease from the same period in 2019. Additionally, tourism revenue is down 41.5 percent to $2.92 billion from last year’s $5.01 billion.

All in all, the tourism, arts and culture ministry announced an overall loss of $10.5 billion in tourism revenue for the first half of 2020. Experts believe that it will take a full year until the industry can fully recover. Despite the lifting of domestic travel restrictions, many hotels remain certain that they won’t reach pre-lockdown levels of guest occupancy.

With an average occupancy rate of only 20 per cent or less, several hotels have already shut down. And big names aren’t exempt either – after four decades as a four-star resort in Penang, the Holiday Inn Resort announced that they will be closing permanently from June 30 onwards.

In fact, the following eleven hotels have already announced their permanent closure:

  • Kinta Riverfront Hotel & Suites in Ipoh
  • Tower Regency Hotel in Ipoh
  • Travelodge Hotel in Ipoh
  • G City Club Hotel in Kuala Lumpur
  • Ramada Plaza Hotel in Malacca
  • The Emperor Hotel in Malacca
  • Jerejak Island Resort in Penang
  • Penaga Hotel in Penang
  • Mercure Beach in Penang
  • The Jazz Hotel in Penang
  • The Gurney Resort Hotel and Residences in Penang

Additionally, both the Ritz Garden Hotel in Ipoh and the Aava Malacca Hotel in Melaka have temporarily closed their operations from April 1 onwards. The Berjaya Tioman Resort, also known as the largest hotel in the holiday island of Tioman, has also temporarily shut down from June 15 onwards in order to focus on facility renovations.

Bellhops and whistles

Sadly, these losses have trickled down to those employed under Malaysia’s hospitality sector. As of May 31, over 30,000 hotel workers have lost their jobs. More than 10,000 were forced to take indefinite unpaid leaves and 6,000 were given abrupt pay cuts.

Hotel workers are some of the hardest hit employees under the pandemic. And more Malaysians continue to lose their jobs – by the end of May, the unemployment rate has skyrocketed to a staggering 5.3 per cent, with over 826,100 people with no source of income.

Some hospitality workers are considering legal action over their alleged unjust and sudden termination. Employees of Penang’s Holiday Inn Resort were one morning given termination notices with immediate effect and were told that they would “be paid in lieu of notice.”

Hotels lobby

The government has swiftly responded to the tourism crisis. In June, the tourism, arts and culture Ministry introduced a special fund for tourism, which will offer soft loans with a minimum of 50,000 ringgit ($11,700) and a maximum of ten million ringgit ($2.34 million) to small and medium tourism entrepreneurs.

Although the government has extended its wage subsidy programme under the Economic Recovery Plan (Penjana), the Malaysian Association of Hotels is currently lobbying for a hotel-specific stimulus package. The union hopes to achieve a 50 per cent wage subsidy for employees with monthly income of 4,000 ringgit ($940) or below, and 30 per cent for those earning between 4,000 and 8,000 ringgit ($1,880).

Additionally, Lap Yip Seng, CEO of the the Malaysian Association of Hotels, believes that home-sharing operations like AirBnB must be stopped so hotels can fully recover.

“The government must place priority on tax-paying businesses that support the employment of locals,” he argued.

Although it may take a while before the hotel sector fully recovers, hopefully these initiatives will somehow get the struggling hotel industry back on their feet once more.



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As Malaysia’s hotels shut down, hospitality workers find themselves out of work. By Jeremiah Capacillo The Ramada Plaza in Malacca is among the bigger calamities of the Covid-19 pandemic With the Covid-19 pandemic raging on and potential tourists remain shackled to their home countries, a number of hotels in Malaysia found themselves in the position of having to close up for good. A survey from the Malaysian Association of Hotels finds that 15 per cent of hotels in the country, or approximately 700 hotels, are projected to shut down permanently in 2020. Out of the 324 hotels questioned in the...

As Malaysia’s hotels shut down, hospitality workers find themselves out of work.

By Jeremiah Capacillo

The Ramada Plaza in Malacca is among the bigger calamities of the Covid-19 pandemic

With the Covid-19 pandemic raging on and potential tourists remain shackled to their home countries, a number of hotels in Malaysia found themselves in the position of having to close up for good. A survey from the Malaysian Association of Hotels finds that 15 per cent of hotels in the country, or approximately 700 hotels, are projected to shut down permanently in 2020.

Out of the 324 hotels questioned in the survey, 50 per cent responded that they are considering ceasing operations permanently, and 35 per cent said they would temporarily halt their businesses to recoup their losses. Some hotels said they would remain closed at least until the end of the year, while others said they would only resume their businesses after a vaccine for Covid-19 is found.

Although hotels are allowed to operate under Malaysia’s movement control order, they are prohibited from accepting new guests and can only entertain guests who have checked-in before March 18. Sadly, this endangers the livelihoods of thousands of hospitality workers.

A tourism drought

Stringent international travel restrictions are severely impacting the country’s tourism industry. 4,233,425 foreign tourists visited Malaysia in the first quarter of 2020, a 36.8 per cent decrease from the same period in 2019. Additionally, tourism revenue is down 41.5 percent to $2.92 billion from last year’s $5.01 billion.

All in all, the tourism, arts and culture ministry announced an overall loss of $10.5 billion in tourism revenue for the first half of 2020. Experts believe that it will take a full year until the industry can fully recover. Despite the lifting of domestic travel restrictions, many hotels remain certain that they won’t reach pre-lockdown levels of guest occupancy.

With an average occupancy rate of only 20 per cent or less, several hotels have already shut down. And big names aren’t exempt either – after four decades as a four-star resort in Penang, the Holiday Inn Resort announced that they will be closing permanently from June 30 onwards.

In fact, the following eleven hotels have already announced their permanent closure:

  • Kinta Riverfront Hotel & Suites in Ipoh
  • Tower Regency Hotel in Ipoh
  • Travelodge Hotel in Ipoh
  • G City Club Hotel in Kuala Lumpur
  • Ramada Plaza Hotel in Malacca
  • The Emperor Hotel in Malacca
  • Jerejak Island Resort in Penang
  • Penaga Hotel in Penang
  • Mercure Beach in Penang
  • The Jazz Hotel in Penang
  • The Gurney Resort Hotel and Residences in Penang

Additionally, both the Ritz Garden Hotel in Ipoh and the Aava Malacca Hotel in Melaka have temporarily closed their operations from April 1 onwards. The Berjaya Tioman Resort, also known as the largest hotel in the holiday island of Tioman, has also temporarily shut down from June 15 onwards in order to focus on facility renovations.

Bellhops and whistles

Sadly, these losses have trickled down to those employed under Malaysia’s hospitality sector. As of May 31, over 30,000 hotel workers have lost their jobs. More than 10,000 were forced to take indefinite unpaid leaves and 6,000 were given abrupt pay cuts.

Hotel workers are some of the hardest hit employees under the pandemic. And more Malaysians continue to lose their jobs – by the end of May, the unemployment rate has skyrocketed to a staggering 5.3 per cent, with over 826,100 people with no source of income.

Some hospitality workers are considering legal action over their alleged unjust and sudden termination. Employees of Penang’s Holiday Inn Resort were one morning given termination notices with immediate effect and were told that they would “be paid in lieu of notice.”

Hotels lobby

The government has swiftly responded to the tourism crisis. In June, the tourism, arts and culture Ministry introduced a special fund for tourism, which will offer soft loans with a minimum of 50,000 ringgit ($11,700) and a maximum of ten million ringgit ($2.34 million) to small and medium tourism entrepreneurs.

Although the government has extended its wage subsidy programme under the Economic Recovery Plan (Penjana), the Malaysian Association of Hotels is currently lobbying for a hotel-specific stimulus package. The union hopes to achieve a 50 per cent wage subsidy for employees with monthly income of 4,000 ringgit ($940) or below, and 30 per cent for those earning between 4,000 and 8,000 ringgit ($1,880).

Additionally, Lap Yip Seng, CEO of the the Malaysian Association of Hotels, believes that home-sharing operations like AirBnB must be stopped so hotels can fully recover.

“The government must place priority on tax-paying businesses that support the employment of locals,” he argued.

Although it may take a while before the hotel sector fully recovers, hopefully these initiatives will somehow get the struggling hotel industry back on their feet once more.



Support ASEAN news

Investvine has been a consistent voice in ASEAN news for more than a decade. From breaking news to exclusive interviews with key ASEAN leaders, we have brought you factual and engaging reports – the stories that matter, free of charge.

Like many news organisations, we are striving to survive in an age of reduced advertising and biased journalism. Our mission is to rise above today’s challenges and chart tomorrow’s world with clear, dependable reporting.

Support us now with a donation of your choosing. Your contribution will help us shine a light on important ASEAN stories, reach more people and lift the manifold voices of this dynamic, influential region.

$
Personal Info

Donation Total: $10.00

 

 

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