SARAWAK hoteliers and tourism industry players said they could be pushed over the brink without more assistance from the government or if access to aid is not made easier.

The state’s hoteliers said with the average occupancy rate at under 25% and the industry projecting a loss of RM11.57 billion in tourism receipts, 243,000 jobs – 15,000 of them in the hotel industry – are under threat and many businesses will not have the staying power to last the next six months without more help.

According to the Sarawak Tourism Federation (STF), the sector accounts for 8.72% of Sarawak’s gross domestic product, while the 243,000 jobs make up 19.1% of its total employment.

Sarawak’s Malaysian Association of Hotels (MAH) chairman Nordin Ibrahim told The Malaysian Insight that the crunch for hoteliers will start in September until year-end.

How business picks up for hotels after the end of the recovery movement-control order (RMCO) in August will determine if they stay in business or shut down, Nordin said.

As Sarawak slowly lifts travel restrictions on foreigners and non-Sarawak residents, the occupancy rate of some hotels, apart from those designated “quarantine hotels”, has started to pick up a little, Nordin said.

Currently, most of the state’s MAH-member hotels have an occupancy rate of below 25%, while the rate for the smaller hotels, including budget hotels that are members of the Malaysian Budget Hotels Association (MyBA), is in the single digits.

Bucking the trend, even if only at the weekends, are resort hotels running at 70% capacity.

“The three-month closure was very challenging for the industry, in particular smaller hotels,” Nordin said of the restrictive measures in place since March 18 to curb the transmission of Covid-19, including border closures and a total travel ban.

While most hotels that have a 200-room inventory “enjoyed the luxury of a full house” and have revenue streaming in from being quarantine hotels to cover operational costs, smaller hotels are in dire straits.

The Sarawak chapter of the MAH has 85 members with 11,876 rooms.

Seven of the members’ hotels are in the five-star category, 14 (four stars) and 34 (three stars).

There are 596 hotels in Sarawak with 20,891 rooms.

With hoteliers estimating it will take between 12 and 24 months to recover if restrictions are lifted at the end of August, Nordin said “more assistance” is needed to help hotels retain staff and meet operational costs until they get back on their feet.

“We need more support from the state and federal governments to survive.

“The Sayang Sarawak, Prihatin and Penjana stimulus packages and financial assistance from the state and federal governments have helped the industry remain sustainable, but only for the next few months.”

Government assistance has been proffered to small and medium enterprises (SMEs) impacted by the Covid-19 outbreak, with financing of up to RM1 million, while a wage-subsidy programme (WSP) has helped employers retain local workers and receive special rebates on utility bills.

STF, meanwhile, said up to 75% of the state’s tourism industry players could shut down if no further assistance is rendered.

In a discussion with state Tourism, Arts and Culture Minister Abdul Karim Hamzah late last month, industry players proposed the setting up of a nearly RM400 million tourism ecosystem stabilisation fund as “emergency action to mitigate certain irreparable damage to the industry” and to enable the industry to weather the crisis.

The proposed fund is to provide, among others, cash-flow aid, securitised loans and equity investment assistance, which is an option to have the government take up equity in securitisable entities at a discount to market value.

According to sources at the closed-door dialogue, Karim was unhappy with the large sum.

At a dinner he hosted for his federal counterpart Nancy Shukri a few days later, Karim told the industry players “to get out of the industry” if they are unhappy with the state government’s incentives.

“If you’re not happy, you get out from this industry. My advice is to look for some other businesses, look for other industries,” he had said.

“If you are asking for much more than what we can give, what is enough? You tell me how much is enough?” – July 15, 2020.