It is noteworthy that Budget 2021 has continued to provide help for our flagging tourism industry which continues to go through a rough patch with the persistence of the Covid-19 epidemic, but hopefully there's more in store in the short, medium as well as long-term.
Given that the tourism sector is indeed one the most affected in terms of job security and losses, more could be done by the government. That is, in terms of implementation and adjustments to help preserve jobs and even expand job opportunities, both directly as well as indirectly.
EMIR Research would like to, therefore, recommend some policy proposals to supplement and complement the provisions of Budget 2021 for the tourism industry and proposals made by others, e.g. vouchers for physical as well as virtual tourism.
Indirect measures – from 1st quarter of January 2021 onwards for green travel bubbles:
1. The government should suspend the departure levy by way of the exercise of ministerial power in the form of an executive order to provide for exemption under section 31(1) of the Departure Levy Act (2019).
2. Suspend the passenger service charge (PSC) for six months – reviewable for the purpose of extending the suspension.
3. Substantially reduce the pick-up and drop off charges for taxis, e-hailing cars, vans and buses/ coaches – at KLIA & klia2 for three months and reviewable for the purpose of extending the suspension.
4. The government in synergy with TNB to reactivate the provision of discount on electricity tariff bills for one year from Jan 2021 onwards. From April 1 till September 30, 2020, the tourism sector enjoyed a 15 per cent rebate.
5. Going forward, a special industry tariff could also be considered.
As for direct measures, the Ministry of Finance (MoF) and Ministry of Tourism, Arts, Culture (Motac) together with interested parties (in the form of a consortium) could establish a special purpose vehicle (SPV) to provide the following financing services:
a. Bridge financing; working capital loans; and invoice factoring services - cash advance will be made on full-term or 100 per cent basis; and cost of financing to be subsidised by the government (in effect, interest free for the interested or applicable tourism players).
b. In relation to the Special Fund for Tourism (SFT3) under the Small Medium Enterprise Development Bank Malaysia Berhad (SME Bank), Motac and the Tourism Fund Financing Committee to work with the Ministry of Entrepreneur Development and Cooperatives (Medac) and SME Bank to implement interest-free financing for SMEs in the tourism sector. And the government could also subsidise repayment by up to 30 per cent of the loan value.
c. MoF in conjunction with Motac to extend the amount as well as remit and scope of the Gamelan (Galakan Melancong Malaysia) matching grant (under Motac) for reimbursables by tourism players. The amount should be increased from RM5 million to RM15 million whilst the allotted sum per eligible company or association or agent could be increased from RM200,000 to RM500,000 as the maximum ceiling.
d. Accordingly, the band of reimbursement should, therefore, by correspondence be upped to RM500,000 or 50 per cent of the total actual expenditure, whichever is lower. In terms of the remit and scope, this should be extended beyond the marketing, promotional and advertising activities such as participation in expos and fairs and roadshows.
e. Extensions could include promotional packages in the form of virtual tourism based on augmented reality (AR) technology, time-period generous discounts, loyalty and reward programmes, membership schemes, vouchers, free gifts, work from hotel schemes, etc.
f. In addition, the grant could also be deployed by hotels and resorts to promote sustainability and eco-friendliness – such as the installation of rainwater harvesting mechanisms, artificial waterfall using recyclable water, solar panels or photovoltaic (PV) modules, smart LED lighting, green walls (i.e. with plants), mini-greenhouses, etc.
g. And also, to promote digitalisation and adoption of and adaptation to smart technology. The Internet of Things or IoT would, for example, apply to the setting within the hotel room. A single remote-control device in the form of a decoder app acts as the central dashboard. This for activities ranging from switching on the aircon to closing the curtains.
All of these can enhance the branding and profile of the hotels and resorts in particular, and of the Malaysian tourism industry in general. Reduction in corporate tax at the prevailing rate of 24 to 20 per cent for all hotels (resident and non-resident) with a paid-up capital of more than RM2.5. million.
Moving forward, the government can be expected to continue engaging with all stakeholders from the tourism sector and make further progress along the way.
The writer is Head of Social, Law & Human Rights at EMIR Research, an independent think tank focussed on strategic policy recommendations based on rigorous research.
The views expressed in this article are the author's own and do not necessarily reflect those of the New Straits Times