By Sharina Ahmad
THE hospitality and tourism sector, which is expected to be one of the sectors worst hit by the Covid-19 outbreak, has received a shot-in-the-arm from the recently announced economic stimulus package.
Among the measures is that tourism-related businesses can delay remitting their monthly income tax to the government. Also, they will get a discount on their monthly electricity bills from April to September.
Other initiatives include a 15% discount in monthly electricity bills to hotels, travel agencies, airlines, shopping malls, and convention and exhibition centres.
The government has also called for industry players to play their part – for hotels to offer discounts and shopping malls to reduce rentals to their tenants.
Pullman Kuala Lumpur City Centre Hotel & Residences, Malaysia general manager Wolfgang Kiesel says it is a great initiative from the government to help boost and stimulate the local hotel industry with the 6% service tax exemption. This exemption will be effective from March to August 2020.
Meanwhile, Sunway Malls and Theme Parks CEO HC Chan says a timely stimulus package would ease the impact of the Covid-19 outbreak and to bolster the economy.
“It is a well-balanced and well-thought package that addresses the immediate concerns of sectors that are hit the most while keeping a focus on longer-term economic growth and robustness,” Chan tells FocusM.
He says the company welcomes the initiatives as they cover a broad spectrum from fiscal measures to monetary easing.
“We opine the restructuring of the payment period and 15% discount on electricity bill present an immediate stimulus for the mall industry, as they allow better cash-flow planning,” he adds.
However, Chan says the company is of the view the savings generated from the electricity discount should be used to encourage more consumer spending through marketing programmes, shoppers’ rewards, tenants’ vouchers adoption and free parking to create a multiplier effect.
Sunway Malls believes this approach is more financially sustainable for the industry.
As for the prescription of the rental rebate, this requires a longer period to know its impact, he says.
“We will, however, take cognizance of this and monitor the development more closely.”
He adds that the reduction in Employees’ Provident Fund (EPF) contribution will free up disposable income of up to RM10 bil into the hands of the consumer, which can stimulate consumer spending.
“We opine that domestic tourism presents a better and viable business opportunity in these times when international travel sees a drop. We welcome any initiatives that drive local consumption.
“We believe the long-term outlook of the economy will remain resilient due to strong economic fundamentals. And with the expected containment of the Covid-19 in the near term, we foresee a rebound and normalisation in the coming quarters,” he says.
Impiana KLCC Hotel general manager David Xavier says the stimulus package spells good news for the hotel industry.
“We are pleased that the government has stepped up its efforts to assist the industry to steer through the challenging times ahead amidst the Covid-19 scare.
“We are confident that the incentives introduced will enable Malaysians to get some well-deserved ‘rest and recuperation’ as they plan their travels domestically in the months ahead.
“This will definitely boost the Visit Malaysia Year 2020 campaign among locals. In fact, during this Covid-19 crisis, we have already started to put in place the Impiana crisis management plan which includes various energy-saving measures such as systematically closing floors for upgrading and refurbishment. The added incentives from the government provide an added relief,” says Xavier.
The Edison George Town executive director Rina Teoh says the commitment by the government in stimulating the economy and protecting jobs is very encouraging.
“The easing of cash flow and the financial burden of stakeholders particularly in tourism shows that the government is listening. And for that our company is thankful.
“Now we will have to pool our efforts with this stimulus package to weather this storm and prepare for the coming recovery,” she opines.
Similarly, Ormond Group CEO Gareth Lim says the group is encouraged and appreciative of the stimulus package announced by the government.
“We are very pleased that there are also incentives to train and develop our people – the backbone of the service industry.”
Under the stimulus package, the government will provide double deduction on expenses incurred on approved tourism-related training. It will also provide up to RM100 mil on a matching grant basis to HRDF (Human Resources Development Fund) to fund an additional 40,000 employees from the tourism and other affected sectors.
The government will also provide RM50 mil to subsidise short courses in digital skills and highly skilled courses. – Feb 28, 2020
