GEORGE TOWN – Once the third-largest gross domestic product (GDP) contributor pre-pandemic, the now-languishing tourism industry is calling for a short-term interest-free loan moratorium to get back on its feet.
The Penang chapter of the Malaysia Association of Tour and Travel Agents (Matta) has proposed that the Finance Ministry convince banks to offer loan moratoriums to tourism players still reeling from the economic effects of the pandemic.
Its chairman Vergis Matthews said past moratoriums have not proven to be effective in helping the industry players recover from their losses that stemmed from the various travel restrictions over the last two years.
He added that up to 30% of some 300 tour agents and agencies in Penang have shuttered permanently, while others are still struggling to stay afloat and grappling to repay the interests accrued from the previous moratorium.
Tourism was the third-largest contributor to Malaysia’s GDP, after the manufacturing and commodities sectors in 2019, making up about 15.9% of total GDP.
Although the borders are reopened, the inbound market is still struggling due to current travel hesitancy,” Vergis told The Vibes after an event at Lexis Suites Hotel here.
He also suggested that the government inject strategic fiscal incentives into the domestic tourism market as domestic spending has seen a shortfall due to inflationary pressures.
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“Look at what Singapore has done to its tourism sector. It has injected millions to sustain the sector, which employs many people.”
While politicians have called for extensions on loan moratoriums, Vergis said this will only see borrowers accruing interest payments.
However, he said Bank Negara can still compel banks to extend more credit capacity to consumers here because a pandemic is not a short-term disruption but a global crisis.
When the average consumer suffers from inflation, this will discourage spending.”
Meanwhile, industry players face a labour shortage, especially as the youth prefer jobs in the gig economy.
The Malaysian Association of Hotels’ Penang chapter spokesman said he was informed that banks no longer are willing to commit loans to hoteliers, because the industry is seen as among the worst affected.
“I have informed Bank Negara about this. We are worried about our future.”
He added that more should be done to help hotels cope economically, as it will take months to recover despite the reopening of borders. – The Vibes, April 16, 2022
