COVID-19 SPECIAL

Coronavirus: Facing bleak future, some hotels in Malaysia shut down for good

An empty street is seen in front of Petronas Twin Towers after Malaysia's government announced the movement control order, on March 19, 2020. PHOTO: REUTERS

At least 10 hotels in Malaysia have shut down permanently in the last few weeks due to the impact of the coronavirus pandemic, sparking concern about what the future holds for travel and tourism players.

All the hotels were forced to shut from March 18, when the country started to implement its movement curbs nationwide, which barred most businesses from operating. The closing of borders by Malaysia, including its airports, has stopped the leisure industry in its tracks.

As of the end of March, at least 2,041 hotel employees had been laid off while 9,773 were on unpaid leave and another 5,054 took pay cuts, according to the Malaysian Association of Hotels (MAH).

Despite the lingering uncertainty, thousands of operators are trying to survive the shutdown.

Mr Munir Shaari, owner of Anjungan Beach Resort and Spa on Pangkor island, told The Straits Times he spends at least RM45,000 (S$14,800) a month on staff salaries and the upkeep of the 35-room hotel.

Mr Munir, who is chairman of the Pangkor Island Hotel and Resort Development Association, said airlines would need to resume operations to enable visitors, including foreign tourists, to visit the island and fill up hotel rooms.

"Our sales were quite good in the first two months of this year and occupancy was around 85 per cent. However, we're now not making any revenue and yet expenses like staff salaries, utilities, maintenance, security, swimming pool cleaning and gardening still need to be paid," he said.

Malaysia yesterday entered the 50th day of the movement control order (MCO).

At least five hotels in Penang and three in the Perak capital of Ipoh have ceased operations.

MAH chief executive officer Yap Lip Seng said that based on a survey of 324 hotels, 15 per cent said they might consider closing down permanently, with 35 per cent considering a temporary closure. He said 93 per cent of the respondents said their hotels needed a minimum of six months' wage subsidy to stay afloat.

He told The Edge Markets online news that hotels were looking at potential losses of RM3.3 billion from room revenue alone for the January to June period if the MCO had ended on April 28, and far worse if it was extended.

Even the mighty Genting Group was hit, with the company temporarily shutting down its mountaintop resorts at Genting Highlands; in Kijal, Terengganu; and in Langkawi until the MCO ends. The curbs are expected to last until next Tuesday, unless they are extended again.

  • 2,041

    Hotel employees laid off as of the end of March.

    9,773

    Those who went on unpaid leave; 5,054 took pay cuts, according to the Malaysian Association of Hotels.

There has also been debate in the travel and tourism industry on whether people will quickly take to flying again if a vaccine for the coronavirus has not been found.

Boutique owner and avid traveller Anissa Ahmad Azim, 29, said: "The itch (to travel) is there, but seeing how serious things have become, it would only be wise for people to hold off on their holiday plans... It's not worth it to risk your health."

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A version of this article appeared in the print edition of The Straits Times on May 07, 2020, with the headline Facing bleak future, some hotels in Malaysia shut down for good. Subscribe