GEORGE TOWN – Of the 69 Malaysian Association of Hotels (MAH) members polled in Penang, 11 are permanently shut, 21 are temporarily closed, leaving just 36 in operation.
And, one Rainbow Paradise Hotel in Tg Bungah has been converted into a Covid-19 quarantine centre for the Health Ministry to accommodate returning overseas travellers, with a token staff of 20 manning the facility.
In a SWOT (strengths, weaknesses, opportunities and threats) analysis made available to The Vibes, MAH’s Penang chapter found that it is up to hotel owners and top management if they want to continue their businesses as tourism grinds to a halt.
Meanwhile, just 2,499 hospitality employees have been retained while 2,369 have been taking pay cuts or other cost-cutting measures, while up to 1,000 face the possibility of retrenchment.
So far, Eastin Hotel, G Hotel, Hotel Royal, Iconic Hotel, Bayview Beach and Bayview George Town hotels, and The Light Hotel have been retaining their payroll despite the bleak outlook.
Hotels listed as permanently closed for now are Hotel Sentral Seaview, Penaga Hotel, Jazz Hotel, Equatorial Hotel, Ferringhi Hotel, Gurney Hotel (rebranding), Holiday Inn Resort, Northam All Suites, Safira Country Club, Armenian Street Heritage and Eton Hotel Penang.
Hotels in Penang cannot sustain operational costs despite the government’s wage subsidy programme, compounded by what industry players say are “anaemic” policies used to fight the pandemic.
There are up to 300 hotels in Penang, but less than 200 are registered with MAH. The rest are either defined as budget hotels or prefer to operate exclusively on their own platforms.
Wage subsidies too low?
MAH chief executive officer Yap Lip Seng told The Vibes that, since last year, the association found that 90 hotels across the country had been temporarily or permanently shuttered, affecting more than 7,000 employees.
He said of the total hospitality workforce, more than 6% has been retrenched and others placed on pay cuts or unpaid leave.
This year’s movement control order (MCO 2.0) saw a few more hotels announcing their closures amid record low occupancy rates.
“We can expect more hotels to close and more people to lose their jobs in the coming weeks.”
The worsening economic outlook is mainly elevated by the uncertainties of the movement control orders, hampering confidence in travel, and the lack of support from the government to ensure the survival of tourism and hospitality industries, Yap said.
He added that the only way out for now is simply urging the government to consider a 50% wage subsidy programme for those earning up to RM4,000 and 30% for those earning up to RM8,000, so employers are able to retain jobs.
“The current low wage subsidies is the main reason for higher unemployment.”
The industry needs assistance to minimise operating costs, such as electricity and water, Yap said.
MAH has proposed a 50% discount for electricity consumption. The industry was given a 15% discount until last September and 10% off currently.
It was reported that Tenaga Nasional Bhd recorded a net profit of RM2.38 billion up to last September.
The hospitality industry also needs more support for local governments to extend discounts for assessments and quit rent, at the same time the 3.6 million workforce is urging the government to instruct banks and financial institutions to extend the automatic loan moratorium.
“By next month, an estimated 1,000 employees nationwide will need to find new jobs if assistance is not forthcoming,” said Yap. – The Vibes, February 1, 2021
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