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Hotels can't depend on domestic travel to survive

PETALING JAYA (June 22): Hotel operators are seeing a slight recovery in the industry following the reopening of domestic tourism and after drastic cost-cutting measures by hotel operators, said Malaysian Association of Hotels CEO Yap Lip Seng.

"Hotels that need to be closed, have already been closed. For those that have been temporarily closed due to the Covid-19 pandemic prevention measures, are reopening with the reintroduction of local travel," Yap said.

Nonetheless, he told EdgeProp.my that if the country's total border closure remains until the second quarter of next year (2021), hotels may be forced to take further action to control operating costs.

Hence, he hopes that Malaysia's international borders could be opened in stages starting as soon as the fourth quarter of this year to Asean countries. He is also looking forward to the introduction of a ‘travel bubble’ which refers to travel permission between countries that have contained the Covid-19 outbreak.

Yap stressed that domestic tourism alone would not be enough for hotels to survive. In MAH’s Moving Forward Survey covering 402 respondents, domestic customers usually make up 55% of total hotel guests.

According to Tourism Malaysia’s data, per capita expenditure of foreign tourists in 2019 was at RM3,300, while a domestic tourist only contributed RM804.

Data published by the Department of Statistics Malaysia in September 2019 showed that in 2018, only less than 30% accommodation expenditure came from domestic tourism.

“The hotel industry is now awaiting full details of the government's RM1 billion tourism funding, and how it can assist hotels to restart and stay competitive. While the extension of wage subsidy is welcomed, generally it is insufficient,” he added.

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