WHILE hotels have seen an increase in bookings and occupancy as domestic travel resumes, hoteliers said it could take up to two years for the industry to fully recover from the economic impact of Covid-19.

They expect domestic travellers to make up the bulk of business in the short term before international guests are allowed back in Malaysia next year, when the borders are expected to reopen.

The government has yet to say when international tourists will be welcomed back into the country although travel restrictions have been eased for locals.

“Without international arrivals, it would seem that the industry should not be expecting a full recovery,” Yap Ling Seng of the Malaysian Association of Hotels (MAH) told The Malaysian Insight.

He said this was because tourist arrivals in Malaysia were made up of 55% domestic travellers and 45% international ones.

“Domestic tourists will be dominant in the next one year, and with the staggered reopening of international borders soon, the industry can anticipate international guests again in 2022; a full recovery will take another one to two years after that, into 2023-2024,” Yap said.

Opening soon

Last week, Tourism, Arts and Culture Minister Nancy Shukri told an international news network that Malaysia may open its borders to foreign tourists in November after nearly two years of closure.

Interstate travel was barred in March last year during a nationwide lockdown. It was lifted months later in June when the Covid-19 situation improved but reintroduced in early January amid a spike in infections.

On October 11, interstate and outbound overseas travel were allowed after the country had vaccinated 90% of adults.

Yap said even before the announcement, hotels were already seeing an increase in enquiries for popular destinations such as Penang, Perak, Genting Highlands and Johor.

However, he said Sabah and Sarawak were still under restrictions.

“We have yet to receive all the data but prior to the reopening of interstate travel, average occupancy was at 20-25%; in KL it was about 25%. Penang was still seeing a single-digit occupancy rate then.

“With reopening, based on last year’s trends during the recovery MCO, overall average occupancy is expected to increase to about 40%,” he said.

Tourism is among sectors most affected by the Covid-19 pandemic, which effects have seared travel and tour operators and hotels.

Yap said MAH estimates 120 hotels have closed down either temporarily or for good.

The hotel industry is reported to have lost over RM6.5 billion in revenues in 2020 and likely to lose at least RM9 billion more this year.

Budget hotels need government aid

Budget and Business Hotel Association president Emmy Suraya Hussein said higher occupancy has been noted in mainly resort hotels.

“City hotels in Penang, Ipoh, and Malacca also reported an increase in occupancy. However hotels in Kuala Lumpur and Selangor have seen a slower take up rate,” she said.

She said as Deepavali approaches, many hotels are already fully booked for as far ahead as  the December school holidays.

Emmy said occupancy is expected to gradually increase until April.  

However, budget hotels that went out of business as a result of the lockdowns will require government assistance to reopen.

“The association is seeking the government’s help to assist hoteliers as Budget 2022 approaches. We’re hoping for a grant, a continuation of the wages subsidy and a waiver on the SST.” – October 26, 2021.