[ Road to Malaysia’s Tourism Recovery Series 1 ] Uncertainty of pandemic hits Malaysia’s tourism recovery, difficult to sustain without opening up for international tourists

By Lim Ann Gee (Oriental Daily News)

Tourism has always been one of the main sources of income for the Malaysian economy. Prior to the pandemic outbreak, tourism pumped some RM86 billion into Malaysia in 2019. The industry has also created numerous job opportunities, adding 3.6 million jobs across the country.

However, the Coronavirus outbreak of 2020 has impacted industries across the world. The highly people-centric tourism industry was suddenly brought to a halt.

It has been two years and the Covid-19 pandemic has continued to rage on. Countries around the world have rolled out their vaccination drives to inoculate their population against the virus which has brought the number of confirmed cases down significantly. As the tourism industry almost saw signs of recovery on the horizon, a highly contagious Omicron variant of the virus was detected, setting the tourism industry even further back on its road to recovery.

Oriental Daily conducted a number of interviews with several Malaysian tourism industry players to get a better understanding of the current state of the industry.

Mint Leong, deputy president of the Malaysian Inbound Tourism Association (MITA), said that the unstable and uncertain pandemic has made the tourism industry unable to see a way forward.

According to her, the new Omicron variant of the coronavirus has had little impact on the domestic tourism industry in general, however, it has had a more noticeable effect on the recovering inbound tourism industry.

“In this period of uncertainty, those of us in the industry cannot see a way forward. We are unable to make plans for anything because the pandemic is changing so often.”

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For example, local inbound tourism operators had at first, planned to roll out several promotional activities in 2022 for tourism. However, due to the uncertainty brought about by the Omicron variant, many of these projects had to be readjusted or put on hold.

Speaking frankly, she said that although Malaysia’s current tourism industry is experiencing a good recovery, the overall situation is still far from conducive for a full recovery of the tourism sector.

“Every stage of recovery has been short-lived. Progress flattens out and then recovery begins again before being flattened. This unpredictable state is far from conducive to the overall recovery of the tourism sector.”

She pointed out that in order to assist travel agencies with this recovery, the best solution for now would be to open up to allow many more inbound tourists in.

She believes that if the government does not aggressively push for the reopening of our borders, the inbound tourism industry will experience a late recovery and will be the industry that suffers the worst impact from the pandemic.

Hotel occupancy was less than 30% in 2021

Malaysian Association of Hotels CEO Yap Lip Seng also agreed that the hotel industry in Malaysia is in urgent need of foreign tourists.

They said that 45% of tourists in Malaysia’s hotel industry are foreign tourists while the remaining 55% are domestic tourists. In the absence of foreign tourists, the market demand from domestic tourists is not enough to sustain the local hotel industry.

They also mentioned that the emergence of the Omicron variant has caused many countries to tighten restrictions and shutter their borders once again in order to stem the spread of the virus. This, in turn, will delay the reopening of international borders and has become a major concern for the hotel industry.

According to them, before the coronavirus pandemic, the average occupancy rate of hotels in Malaysia in 2019 was 64%. In 2020 as the pandemic struck and the national Movement Control Order (MCO) was implemented, the average occupancy rate for hotels nationwide plunged by half to just 32%.

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“We were expecting a better recovery in 2021, not knowing that it would end up worse since another MCO was imposed from January to October and interstate travel was only recently reopened.”

“In 2021 we expected the average occupancy of hotels (for the entire year) to be under 30%.”

He explained that at the moment, hotels in the country only have high occupancy rates on weekends or in areas with popular tourist attractions like Langkawi and Penang – but not elsewhere.

“Overall, the industry is still struggling, occasionally they have gotten a bit of the recovery on the operation, but not financially, so hotels still need to sustain and survive at this point.

The aviation industry’s slow recovery

Looking back on his experience in the last two years, Malindo Air CEO Captain Mushafiz Mustafa Bakri said that all airline companies have been hit hard by this unprecedented pandemic. Malindo Air’s revenue in March 2020 had tumbled by 95% compared to that of the previous year.

He told us that he originally believed that the coronavirus pandemic would pass quickly with an impact of just 4-6 months like the SARS outbreak. It ended up lasting for over two years.

In an interview with Oriental Daily, he said that due to the sharp drop in revenue, the airline was forced to downsize and major adjustments were made including the reduction of aircraft and employees to reduce costs.

“We returned 20 Boeing 777s and three ATR-72s. Without these aircraft in service, we had to lay off some employees either through termination or a Voluntary Separation Scheme (VSS). This has had a significant impact on our operations since 2020.”

He admitted that while the recovery of the Malaysian aviation market was very slow, the international market was doing much worse. He hopes that the pandemic will simmer down and that things will stabilize in the coming months.

“We wanted a bottomed-out V-shaped recovery, but what we really got is more of an L-shaped recovery.”

He said that the aviation industry is very concerned about the government’s actions and response to this new Covid variant as the operation of the aviation industry depends on the actions of the government.

He hopes the government will not take a zero-based approach in dealing with this Covid-19 variant as Malindo Air has opted to take a risk-based approach with the experience they have accrued over the last two years in dealing with Covid-19 and its variants.

This article is a report produced under the Southeast Asia Forum for Reporting (SEAFORE), supported by Institute for War & Peace Reporting (IWPR).

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