The deployment of the vaccine will be a boost for the hotel sector

PETALING JAYA: Average hotel occupancy rates are expected to hover around 20% in the first quarter of this year, as Malaysia continues to fight the ongoing Covid-19 pandemic.

Malaysian Hotel Association (MAH) general manager Yap Lip Seng (pictured) said a pickup in occupancy rates can be expected once the vaccine is successfully rolled out.

“Immunization programs are not expected to help revive tourism at this time,” he told StarBiz. less than 20% since the announcement of the movement control order last month. The first quarter of 2021 would likely be less than 20% on average.

Based on government projections, Malaysia expects 80% of the population to be vaccinated only by the first quarter of 2022, Yap said.

“This will not be enough for a complete reopening of tourism activities and on top of that, we have not seen any future projects that facilitate the movement of vaccinated people.”

Yap said a system must be put in place to ensure that economic sectors, especially tourism, can take advantage of the vaccination program to promote its recovery.

“The government should also consider priority vaccination for the tourism industry and hotel workers to build and boost the confidence of inbound travelers.

“On top of that, the recovery of international tourism would depend heavily on the success of vaccination programs around the world.”

According to MAH data, the average monthly hotel occupancy rate was 32.43% in 2020.

Average occupancy rates were highest in January at 59.48%, before plunging to a low of 7.58% in April, following the implementation of the Movement Control Order (MCO) on March 18.

Average occupancy rates should gradually increase from May following the implementation of the conditional OLS, to peak at 44.26% in September.

The occupancy rate would fall to 28.55% and 20.62% in October and November respectively, as daily cases of Covid-19 begin to increase.

The average occupancy rate for December, however, was higher at 36.05%, due to the easing of interstate travel restrictions towards the end of the year.

The MAH in a recent statement said more hotels would close or plan to close, since the implementation of the second MCO in January.

“This is the harsh reality of the industry where to date, unofficially, more than 100 hotels have gone out of business since March 2020, directly affecting more than 7,000 employees, the rest being either prolonged pay cuts or leave without pay.

“The second MCO has deprived the industry of any hope of a recovery this year and the industry is expected to lose at least RM 300 million in revenue on average every two weeks from MCO, after losing an estimated $ 6.5 billion. RM last year. “

In the same statement, MAH Chairman Datuk N Subramaniam said the local tourism and hospitality industry employs 3.6 million people and is one of the major contributors to the country’s economy.

“We must be ready for the recovery and maintain our tourism capacity as well as the competitiveness of the region.”

The association also proposed to the government to place the tourism and hospitality workforce on the priority list of the vaccination program after the front lines alongside high-risk groups, to prepare and insure the world. that Malaysia is ready to receive international tourism once the borders reopen.

According to real estate consultancy CBRE | WTW in its 2021 Market Outlook report, hotels are forced to evolve to survive by reducing operating overheads, eliminating duplication of work and finding various alternative sources of income.

“Some hotels only use 50% to 60% of their available room capacity as they recover from an activity. Due to the long-term timing of the global economic recovery, the Covid-19 and prevailing low traveler confidence, the hotel industry is facing a very difficult time.

CBRE | WTW said the tourism industry will continue to depend on domestic travelers where interstate travel is permitted.

“Ongoing government tax breaks and attractive room packages offered by hoteliers are important in boosting the tourism industry. Hotel performance remains subdued as hoteliers strive to stay afloat until the market recovers.

“The recovery of the hotel sector will largely depend on the end of the Covid-19 epidemic and the opening of international borders. Any further setbacks, such as a new wave of a pandemic, could worsen the expected recovery. “

Peter M. Doran