THE multiple movement control orders (MCOs) and restrictions of face-to-face events have severely impacted the business events industry, with revenue losses reported at 90% compared to 2019.
According to the Malaysian Association of Convention and Exhibition Organisers and Suppliers (MACEOS), the continued operating costs to keep businesses afloat, despite the lack of events happening, is now a huge burden to industry players.
“While industry players are told they cannot hold business events during the conditional movement control order (CMCO), exhibition and convention centres still have to pay bills required to keep their venues and businesses open,” said MACEOS president Francis Teo.
“The situation is taking a toll on business events industry players who are struggling to stay afloat,” he added.
The three main types of utilities operating costs industry players are burdened with are:
- Connected load charges imposed by Tenaga Nasional Berhad (TNB) as a penalty for businesses that do not meet the minimum electricity load usage. Although a six-month 15% discount on electricity consumption was granted for the affected hospitality industry, this had expired in September.
- Indah Water Konsortium sewage bills, which for some businesses, can run up to RM10,000 a month, a fixed rate imposed regardless of whether venues are operating or not.
- Annual fixed assessment fees by local councils.
Teo hoped that the Government will help to reduce the burden of industry players during the pandemic by eliminating the Connected Load Charges penalty, reducing tariffs for sewage bills, and lowering the assessment fees.
“It doesn’t have to be a blanket reduction for everyone. The Government could implement it on a case-by-case basis, upon application by the affected companies,” he proposed.
Echoing the sentiments of the Malaysian Association of Hotels (MAH), Teo also urged the Government to consider providing electricity bill discounts of 50% up to June 2021 to allow industry players to recover from the losses this year.
It was noted that TNB had a 46% decrease of profit after tax (PAT) at RM1.4 bil for the first half of its financial year (1H FY2020) compared to the previous year and should shoulder a lower PAT due to current economic conditions.
Teo said that having to pay for the various bills is putting further pressure on an industry that is already stretched to its limits.
“The reductions proposed will really help to keep our operating costs low, especially since we are not allowed to hold business events until the foreseeable future. This in turn will allow us to avoid retrenching people unnecessarily,” he added.
Teo also commented that although the wages subsidy programme as part of efforts to avoid staff retrenchment has been extended till the end of the year, employers still need to fork out up to RM3,400 or 85% of the salary for eligible employees earning RM4,000 or less.
With business events not allowed to take place, the organisers and suppliers have no source of income to be able to keep paying RM3,400 per skilled employee to keep them retained.
Moreover, there is no subsidy for highly skilled employees earning more than this minimum amount.
While the Government has encouraged business events suppliers to go virtual, this is only a fraction of the revenue that can be generated and is not enough to keep companies afloat during this period.
Teo hopes that the Government will allow business events to be organised during the CMCO, assuring all stakeholders of industry players’ strict adherence to standard operating procedures (SOPs).
“With the MICE SOPs already approved by the Malaysian National Security Council (NSC), business events should be allowed to continue to be organised, adjusting participant numbers according to alert levels and venue size,” Teo said.
Before the pandemic hit
Last year, the Malaysia Convention & Exhibition Bureau (MyCEB) reported that the country has won over 301 business events within the first half of the year (1H 2019) worth RM3.9 bil in economic impact.
It was expected for the events to happen between the year 2019 all throughout 2028, with an estimated 570,741 delegates attending with 208,555 international delegates.
During that time, MyCEB and its industry partners managed to secure a record of 1,100 international business events since 2011, comprising international conferences, corporate meetings, incentive travels and trade exhibitions.
All said events have substantially contributed an estimated economic impact of RM8.5 bil to the country. – Dec 25, 2020
