KUALA LUMPUR: When the first Economic Stimulus Package was announced on Feb 27, the government acknowledged that the global Covid-19 outbreak had affected local tourism.
The significant decline in foreign tourist arrivals, it said, led to weaker financial performance and cash flow for tourism and tourism-dependent retail industries.
On March 18, less than a month later, the country was put under the Movement Control Order (MCO) to contain the spread of the disease. Travel restrictions — inbound and outbound — were part of the deal.
That day, the country saw the tragic demise of Visit Malaysia 2020, which was launched with a bang in front of 80,000 people on New Year’s Eve at Dataran Merdeka here.
BLOW TO TOURISM
Even though travel restrictions were eased as the MCO was relaxed to the Conditional and Recovery MCO, the initial limitations were a great blow to the tourism industry.
None of the industry players, from hotels, airlines, and tour companies to other travel-related and -dependent players like retail and transportation, escaped unscathed.
According to data released by the Companies Commission of Malaysia, collated up to Oct 31, 204 tourism-related companies had closed down since the MCO.
About 109 hotels and other short-term lodging operators folded, unable to sustain themselves amid the health and travel restrictions.
Of the total, 77 companies volunteered to shut down, while 32 folded on court orders or self-imposed wind-up.
The hospitality sector aside, 95 travel companies shuttered, with 57 doing so voluntarily. Others were ordered by the courts.
RM45 BILLION IN LOSSES
Malaysia’s tourism sector suffered losses of RM45 billion in tourist expenditure in the first half of the year alone.
Up to September, the country recorded only 4.2 million international tourist arrivals and RM12.6 billion in tourism receipts.
In an interview with the New Straits Times in September, Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri said the two figures, the lowest in four years, were a drop of 68.2 and 69.8 per cent, respectively, compared with the same period last year.
In an earlier report, Nancy said tourism was among the economic sectors hardest hit by Covid-19, and was expected to be the last to recover.
Another survey done in May among 5,000 jobseekers and 1,000 employers by JobStreet Malaysia confirmed that those working in tourism and hospitality were among the hardest hit.
In its August edition, Job Report revealed that 63 per cent of workers in the tourism and travel agency sector, 62 per cent in hospitality and catering, 50 per cent in food and beverage (F&B), 47 per cent in mass transportation and 42 per cent in retail were permanently retrenched or temporarily not working.
The same fate is shared by their colleagues in the airline industry.
The country’s three major airlines —Malaysia Airlines Bhd, AirAsia Group Bhd and Malindo Airways Sdn Bhd — scaled down operations, implemented salary cuts and offered unpaid leave to staff and retrenchment to stay afloat.
The Malaysia Aviation Group offered an early retirement scheme to 50 per cent of its employees from all its subsidiaries, including Malaysia Airlines Bhd, MASwings and Firefly.
Malindo Air laid off 2,200 employees, which is more than half its 3,200-strong workforce, while AirAsia Group slashed 10 per cent of its 24,000 employees.
The aviation industry is projected to lose RM13 billion this year as air travel continues to face restrictions.
This includes a RM10.9 billion loss from the three airlines and another RM2.1 billion from airport operators, including Malaysia Airports Holdings Bhd and Senai Airport Terminal Services Sdn Bhd.
REVIVING THE SECTOR
Thankfully, the industry got its much-needed break when the interstate travel ban was lifted on June 10, which breathed life into domestic tourism, even with strict health restrictions and standard operating procedures (SOP).
The government is helping to revive the sector with an initial focus on domestic tourism.
This effort is supported by initiatives and assistance, including the Economic Recovery Plan (Penjana) and other stimulus packages such as Prihatin.
Among other things, these packages provided an extension of the tourism tax and service tax exemptions for hotels until June next year, and a RM1 billion allocation under the Penjana Tourism Financing scheme for transformation initiatives by small- and medium-sized enterprises.
Under Prihatin, special individual tax relief of up to RM1,000 for domestic tourism expenditure was given to encourage the public to travel domestically, while more than 7,000 ministry-licensed tour guides received a RM600 one-off assistance totalling more than RM4 million.
Industry players, from hotels and resorts to airlines and travel companies, started offering deals and promotions with eye-popping discounts.
Facebook pages like MCO Travel Deals, which is a marketplace for industry players to promote products, became an instant hit among holiday-makers.
The Malaysian Association of Hotels banked on its partner website, RoomieTravels.my, to promote a series of hotel deals with discounts up to 70 per cent.
State tourism jumped on the bandwagon too. Penang Tourism launched the “Jom! Experience Penang” campaign featuring 23 tour packages, while Kelantan put its money on the “Jom Maghi Dderak Di Kelate” campaign that highlighted the Kota Baru, Tumpat and Bachok districts.
NEW HOPE AND PRODUCTS
New tourism products such as the Malaysia Virtual Experience, a pilot project by Tourism Productivity Nexus and Malaysia Productivity Corporation, emerged a few days before the interstate travel was lifted.
This peaked the numbers of pay-to-join virtual tours and experiences offered by online travel platforms like Klook, Airbnb, Agoda and Buddyz.co.
The virtual tourism products surprisingly received an overwhelming response from tourists who were craving to “see and experience the world”, but were still sceptical about physical travel.
While the World Tourism Organisation indicated it would take four years for the industry to fully recover, hopes are high that the availability of vaccines would hasten the process.
The Malaysian Association of Tour and Travel Agents (Matta) projected that tourism in Malaysia would pick up from the third quarter onwards.
Matta honorary secretary-general Nigel Wong expected that local business activities and tourism will gain more momentum, with the Covid-19 vaccine soon becoming available.
He said the association was “cautiously optimistic” that international tourism would restart in Malaysia as soon as next year.
He said international arrivals were key to the survival of the tour and travel industry.
“We hope that the managed re-opening of borders will take place soon, allowing leisure and not just business or essential travel.”
He said Matta had been advocating a managed reopening of borders after the end of the MCO as it believed Malaysia had the infrastructure and know-how to do it.
“(We also hope) that there will be a more targeted and concerted effort by the government to help travel and tourism businesses survive,” he said, adding that Matta would continue to support the government in such endeavours.
Additional reporting by Teh Athira Yusof