30% mid-range hotels to close down due to Covid-19

By Sharina Ahmad

THE global Covid-19 pandemic has brought the travel and hospitality sectors to a halt. The most badly hit are three- and four-star hotels which are expected to bear the brunt of the virus outbreak.

The Malaysian Association of Hotels (MAH) CEO Yap Lip Seng said based on estimation, 30% out of 4,888 hotels registered under The Ministry of Tourism, Arts and Culture are expected to close down soon.

“These are the mid-range (three- to four-star) local brand hotels that would not be able to sustain due negative cash flow for more than three months.

“The next three months will be the tipping point where these hotels would be forced to decide,” he told FocusM.

He noted that the high-end hotels and international brands/chains will likely survive.

“However, we could see them consolidating resources by focusing on one or two hotels of the same chain in an area, while the others might be closed temporarily until tourism recovers to a healthier point,” said Yap.

The situation worsened when the ongoing Visit Malaysia 2020 (VM2020) campaign was cancelled last month and has cost Malaysia’s tourism industry an estimated RM3 bil in losses.

The impact of the virus has also affected the local and international tourism sector.

According to a news article by The Star Online on April 5, five major hotels in Melaka were expected to close down in May due to a drop in occupancy rates.

Some of these hotels, which started out between the 1970s and 1980s, have been badly hit by the decline in revenue since the start of this year.

Nigel Wong, secretary-general of the Malaysian Association of Tour and Travel Agents (Matta), said the cancellation of VM2020 is a wise move made by the government since the impact of the virus has changed the situation drastically.

“No one can predict what will happen next. But, in terms of the number of tourist arrivals, we are looking at zero arrival for now due to some circumstances,” he told FocusM.

Wong said tourism is the first industry that has been adversely affected and also will be the last to recover in this kind of crisis.

“People around the world are not willing to travel anymore. However, the least that we can do moving forward is to revive and further push domestic tourism. This ensures the industry stays afloat and survives,” he said.

According to the World Economic Forum, the world travel and tourism council could cut 50 million jobs worldwide in the travel and tourism industry.

Asia is expected to be the worst affected. Once the outbreak is over, it could take up to 10 months for the industry to recover.

Meanwhile, for hotels which are used as quarantine centres, MAH’s Yap said there is no stigma pertaining to the virus as the quarantine centres are for returning Malaysians without any symptoms, awaiting final test results and they are being monitored by the Ministry of Health (MOH).

“There is little or no interaction between the guests and hotel employees, and there will be no movements in or out of the hotel room within the 14 days. We are further assured that MOH will assist and ensure proper sanitisation after the checkout,” he explained.

He added that hotels that had volunteered should be commended for assisting the government, offering their services for better-controlled quarantine environments.

To date, there are 472 quarantine stations gazetted, including public universities, community colleges, technical institutes and stadiums.

All returning Malaysians or foreign visitors who enter the country will be subjected to the quarantine procedure at all entry points before being transported to the quarantine centres.

Among prominent hotel brands that have been turned into quarantine stations are Best Western in Petaling Jaya, Grand Dorsett Subang in Subang Jaya, Four Points by Sheraton in Puchong, Hilton Petaling Jaya, Palace of the Golden Horses in Seri Kembangan, Hotel Sunway Clio in Petaling Jaya and Hotel Sunway Pyramid, Petaling Jaya, Selangor. – April 6, 2020

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