As the coronavirus pandemic continues to spread, the hotel industry is hurting, sending tens of thousands of employees home for good.
According to the Malaysian Association of Hotels (MAH), about 15 cent of the hotels in Malaysia may have to shut down their operations due to Covid-19 pandemic.
This finding was based on a survey conducted by MAH on April 16.
MAH chief executive officer Yap Lip Seng told the New Straits Times recently that 50 per cent of the hotels responded that they are considering ceasing operations and 35 per cent of hoteliers said they would temporarily halt their businesses.
Yap said some hotel operators have also indicated that they would remain closed till the end of this year, while some said they would only resume their businesses after a vaccine for Covid-19 is found.
A total of 4,880 hotels, including budget hotels, in the country, are registered with the Tourism, Arts and Culture Ministry.
Although hotel services are part of the essential services that are allowed to operate during the Movement Control Order (MCO), hotels are prohibited from accepting new guests, and they can only provide services to those who had already checked-in into the hotel before March 18.
Food and beverage services are to be limited to room service only, and all other facilities and services of the hotel should remain closed.
Yap said now that the MCO period is extended (May 12), many hotels may be forced to decide on the final outcome in the next couple of weeks.
An industry player said that the government stimulus package is not offering any help to small business and hotel owners.
On March 27, 2020, the government issued its second stimulus package valued at RM250 billion to combat the economic impact of the COVID-19 pandemic
"There is not much benefit to the private sector. They are struggling to stay afloat and keeping all their employees. There should be more incentives for the private sector to sustain their business as they are contributing significantly to the country's economy.
"With many hotels shutting down or downsizing, that will have a negative impact on the country's economy as many related-industries will suffer from lost of business. Many hotels have already issued a memo to their employees to say that their salaries will be reduced, or they will have to take three to six months of unpaid leave," he told NST Property.
Estadia Hotel and Hatten Place Melaka have issued a memo asking employees to take unpaid leave from April 15 to June 30 this year.
This is based on a list of cost control management by several companies, including aviation, education, manufacturing and oil & gas that have been circulating in social media.
Bursa-listed Plenitude closing three hotels
Plenitude Bhd has joined the list of companies that are shutting down their hotels due to the Covid-19 pandemic.
Jazz Hotel in Penang announced last week that it is shutting its doors.
Penaga Hotel and Jerejak Island Resort, both managed by VHM Hotel Management Group may follow suit, this is based on memorandums that are circulating on social media.
Kinta Riverfront Hotel and Suites, located in Ipoh, will close for good this month. An inter-office notice, signed by the hotel's board of directors and management representative Tan Kim Hee dated April 22 disclosed that the hotel will close on April 30.
The hotel could no longer sustain its business, having suffered losses for months even before Covid-19, and further sinking into the red after the outbreak of the virus due to cancellation of rooms and events.
Another hotel in Ipoh, the 4-star Tower Regency Hotel has also announced its closure on April 30 to cut losses accumulating over the past three years.
In a filing with Bursa today, Plenitude said it will be closing two hotels in Penang namely Mercure Penang Beach and The Gurney Resort Hotel and Residences, as well as Travelodge Ipoh in Perak with immediate effect.
The developer will also downsize the operations of other hotels it owns due to the outbreak of the virus.
The Covid-19 pandemic had severely impacted its hospitality businesses, the company said.
"With domestic and worldwide travel restrictions, the company's hotels have suffered a significant decrease in business. The has no alternative but to downsize its business and operations," it said.
Plenitude diversified into the hospitality industry since 2001 with only 220 rooms. Today, its portfolio holds over 1,800 hotel rooms inventory in Kuala Lumpur, Penang, and Ipoh. The company also owns Travelodge Myeongdong Euljiro in Seoul, South Korea, its first international foray.
The hospitality division encompasses hotel properties ranging from international hospitality brands to home-grown brands and two residences assets.
Plenitude registered revenue of RM54.2 million and a net profit of RM3.9 million for the quarter ended December 31, 2019, as compared to revenue of RM56.9 million and a net profit of RM8.6 million for the corresponding quarter of the previous year.
The hotel operations contributed revenue of RM22 million, an increase of RM6.1 million compared to revenue of RM15.9 million for the corresponding quarter of the previous year. There was RM5.4 million revenue contribution from the newly-acquired Travelodge Myeongdong Euljiro and RM700,000 from the hotel operations in Malaysia.