HOTELS in Malaysia have racked up losses of RM70 million from some 170,000-room cancellations because of the Covid-19 outbreak so far, said Malaysian Association of Hotels (MAH).

MAH chief executive Yap Lip Seng told The Malaysian Insight the losses could climb up to RM130 million by December.

While the movement-control order is seen as a much-needed move to curb the spread of Covid-19, it comes at a “hefty price”, said Yap.

“The cancellation of bookings represents the current impact caused by the Covid-19 but we are more concerned with the loss of demand in the coming months.

“We foresee that the losses will double by year-end.”

Putrajaya’s movement-control order which kicked off yesterday until March 31 is expected to worsen the situation for the hotel industry although they have been listed as essential services, which allows them to remain open with a limited number of personnel.

Hotels have been told that in-house guests, who checked in before March 18, can stay until their intended checkout dates.

However, they are to remain in their rooms during the movement-control period.

Guests can access food and beverages but they’re limited to room service only.

“Guests are advised to remain in the room throughout the movement-control period. They are allowed to stay until their checkout date,” Yap said.

Foreign guests who have checked out but are unable to leave the country will be referred to their respective embassies or the Immigration Department, said Yap.

Aside from room service, all other facilities and services of the hotel are to remain closed during the next two weeks.

Hotels are also allowed to keep bare minimum staff on the premises during the period for critical needs, such as security and engineering.

Malaysia Budget Hotel Association (MyBHA) president Emmy Suraya Hussein said budget hotels (three stars and below) received the same instructions from the Tourism Ministry and estimates initial losses to be about RM10 million.

Seeking relief

To cope with losses, Yap said MAH proposed that the government offer a temporary reduction of employers’ contribution to EPF, electricity subsidy of 30%, extension of water subsidies, a waiver of quit rent and assessment for tourism properties and also a monthly payroll subsidy for employees earning RM2,000 and below.

“We are also repeating our call for the government to review the rate of the tourism tax to RM1 from the existing rate of RM10, which is within the power of the minister (of finance) under the Tourism Tax Act 2017,” Yap added.

Apart from such requests, MAH is also pursuing negotiations with local service providers and suppliers to hotels to extend a fair discount for this period.

“We are in talks with key vendors, such as Astro, for a reduction in fees and discounts for the period up to December 2020. Hotels are currently paying them for empty rooms and services not utilised.”

Yesterday, the government released the prevention and control of infectious diseases regulations 2020, and the list of essential services has been updated to include hotel and accommodation.

However, this does not allow hotels to operate as usual as the movement-control order still applies, said MOH president Kamaruddin Baharin

“We are aware that many are confused with the situation and the directives and given such short notice to prepare but our advice is to look at the bigger picture and focus on containing the spread before the situation worsens.

“We should all do our part to stop people from moving unnecessarily at a time like this.” – March 19, 2020.