KUALA LUMPUR: THE Covid-19 pandemic and the enforcement of the Movement Control Order (MCO) since March 18 has left the tourism sector at a standstill.
Tourism-related businesses have been badly affected, forcing many hotels and operators to close down or downsize operations, sending tens of thousands of employees home for good.
But the Economic Recovery Plan (Penjana) announced on Friday looks set to revive the sector.
The government has allocated RM1 billion to the Penjana Tourism Financing facility to finance transformation initiatives for small- and medium-sized enterprises (SMEs) in the tourism sector to remain viable and competitive in the new normal. Details of the fund will be announced next month.
There will be an exemption on the tourism tax from July 1 to June 30 next year, while the exemption on the service tax for hotels will be extended to June 30 next year.
Businesses in the tourism industry, such as travel agencies, hotels and airlines, will get an extension on the period for deferment of payment of tax instalments until Dec 31.
This three-month extension is effective from Oct 1 to Dec 31.
To boost domestic tourism, personal income tax relief of RM1, 000 will be given for domestic tourism expenses until Dec 31 next year.
It was reported that RM92.5 million was spent on domestic tourism in 2018 and RM83.1 million in 2017.
Before the pandemic, the government targeted 30 million tourist arrivals and RM100 billion in earnings for Visit Malaysia Year 2020.
In March, Malaysian Association of Hotels (MAH) chief executive officer Yap Lip Seng said 170,085 hotel room bookings valued at RM68 million had been cancelled, up to March 16.
On Penjana, Yap said the tourism industry now saw hope.
"Two and a half months after the MCO started, the tourism industry is finally seeing hope with Penjana. The hotel industry saw business drop to almost zero while having to bear overheads and payroll costs over the same period.
"Hotels have been forced to make difficult decisions to place employees on unpaid leave, cut pay and even lay off staff.
"MAH's survey revealed that 26 per cent of employees have been given unpaid leave, 20 per cent have taken pay cuts and six per cent have been laid off. The number would have grown by now as more hotels announce closures."
Yap lauded the extension of the Wage Subsidy Programme, saying that the incentive to hire unemployed people would encourage the industry to begin hiring again to allow the sector to recover.
But, he said, this was dependent on the recovery in demand.
"The industry is in the dark on when interstate leisure travel will be allowed or when borders will reopen.
"The industry is in need of more information, an indication at a bare minimum on when the government will ease travel restrictions.
"Driving demand should be a focus and this must be done in advance. The domestic market is undoubtedly the immediate target, but eventually, international tourism needs to reopen. For Malaysia, the target will begin with Asean, then China and India."