THE Covid-19 Omicron wave has critically hit hoteliers, causing hotel occupancy rates to drastically drop with up to 60% cancellations.

Malaysian Association of Hotels CEO Yap Lip Seng said many customers cancelled their bookings due to a surge in Omicron cases.

“Some are unable to come as they are diagnosed with Covid-19 or identified as close contacts,” he told The Malaysian Insight.

“Demand was low even before the Omicron outbreak, with less than 40% occupancy rate.”

However, the recent festive season pushed up the occupancy rate, he added.

“For example, Langkawi enjoyed an average occupancy rate of between 60% and 70% (during this period), and Penang’s was 54%.

Malacca, Ipoh in Perak and Port Dickson in Negri Sembilan also saw an increase in occupancy rate.

“Currently, the average domestic hotel occupancy rate is 43%.”

Yap said with the ongoing vaccination drive and booster administration, the industry will gradually recover.

“However, travellers are more cautious following the climb in cases in recent weeks, and are worried.

“Omicron not only affects the local hotel industry’s recovery, but also poses a threat to the country’s plan to reopen borders.”

He said hotels are relying on business conferences and local tourists to survive.

Banquets, business conferences and events held at hotels saw a dip last year, following the movement-control order

“We thought the epidemic is slowly getting under control with fewer cases and the hotel industry looked set to recover,” said Yap.

“But then Omicron hit us, causing business conferences and other activities to be postponed.”

He said most cancellations or postponements are due to people contracting the coronavirus or becoming close contacts.

Low occupancy rate in KL

Malaysia Budget Hotels Association (MyBHA) president Emmy Suraya Hussein said the association’s members also received cancellations.

“We have recently received many cancelled reservations, and cannot deny the fact that more people are getting infected by the virus.”

She, too, said the occupancy rate was good during the Chinese New Year period.

“Many hotels experienced a high occupancy rate for two days during the period, but then it dropped again.”

In Kuala Lumpur, the average occupancy rate of hotels is only at 20% to 25%, she added.

“Omicron spreads swiftly, and people do not want to travel.”

Emmy said she is not optimistic about the plan to reopen borders as the government has been changing its stance on the issue.

MyBHA Johor chairman Jarod Chia said hoteliers enjoyed an upward trend in occupancy rate from November to December and expected a better outcome this year.

“Omicron unexpectedly struck, causing the hotel occupancy rate to decline last month.

“Our initial assessment was that the occupancy rate could rise up to 70%.”

However, he added, the decline came in January, and the 30% to 40% room sale reduction adversely affected the industry.

The majority of those who cancelled their reservations cite their employees who are on business trips testing positive.

“Most people who stay in hotels are on either business trips or meetings,” said Chia.

“In November and December, there were a lot of business conferences, which boosted our sales.

“But we have been hit again and business has dropped. Because of this (Omicron), local tourists have postponed their trips.” – February 27, 2022.