More hotels in Penang may cease operations if MCO, interstate travel ban continues

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The impending closure of Hotel Equatorial Penang is just the tip of the iceberg, with more hotels expected to face similar fates if the interstate travel ban prolongs.

Expressing sadness over news of the impending closure, Malaysian Association of Hotels (MAH) Penang chairman K Raj Kumar said many hotels were already badly affected by the Covid-19 pandemic, made worse with the interstate travel ban.

He said, while many hotels have opted for temporary closure following the implementation of the second Movement Control Order (MCO), those which remained in business only reported about two to four percent occupancy rate.

“If this goes on any longer, it is only a matter of time before more hotels cease operations. As it is, many are already finding it extremely difficult to just survive.

“We really hope the government will come to our aid. We, in particular, and the tourism industry, in general, have not been getting anything from the slew of assistance announced by the government, even during the first MCO.

“It is a difficult time for us and I hope both the federal and state governments will look into our plight and come out with some form of incentive for us,” he was quoted as saying when asked to comment on the impending closure of Hotel Equatorial Penang.

Adverse business conditions caused by the Covid-19 pandemic were reasons given by the hotel in a memo to all employees informing them of the closure.

Raj Kumar said, while MAH Penang has yet to be officially informed of the matter, employees at the hotel did indicate that it will happen.

“All hoteliers feel that this is a very sad piece of news as Hotel Equatorial Penang has always been the market leader in Penang. There are many memories (associated with) the hotel.

“We really hope the hotel will not cease operations and will find a way to sustain and weather this pandemic. We really hope it will continue to operate,” he added.

Meanwhile, former finance minister Lim Guan Eng said the federal government still has not grasped the severity of the problems facing the local hotel and tourism industry that was on the verge of collapse.

Instead, he suggested that the Perikatan Nasional administration under Prime Minister Tan Sri Muhyiddin Yassin appeared to be more focused on pursuits such as an Emergency proclamation and suspending Parliament.

“Instead of facilitating bank loans or an automatic loan moratorium, Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri appears to be trapped in a different reality,” Lim said in a statement.

The Bagan MP cited her statement to the Dewan Rakyat in November last year where Nancy said despite the closure of 109 establishments in the hotel sector and 95 tourism agencies in 2020, her ministry has since approved new licence applications for 135 tourism companies and operators during the same period.

“This is ridiculous. Can Nancy please tell us where are the new tourism agencies in Malaysia? In Budget 2021, the ministry continues to adopt an ‘ostrich in the sand approach’ by predicting the average hotel occupancy for 2020 will be 61.1 percent, and 58.4 percent in 2021.

Sayuti Zainudin

“How can they stick to its initial projection of 61.1 percent hotel occupancy for 2020 when the tourism industry faces RM100 billion in losses last year?” he said.

Faced with this RM100 billion loss in revenue, Lim added that the federal government has not done enough to aid and save the tourism industry.

“Not just hotels, but many tourist agencies and bus operators have closed shop. If the basic infrastructure of tourism either collapses or closes down, how can Malaysia benefit from any revival of the tourist industry?” he asked.

He lamented the upcoming closure of the Equatorial Hotel Penang, as it is one of the earliest five-star hotels in the state which was brought in by the late Penang Chief Minister Tun Dr Lim Chong Eu in the 1970s.

“As a Unesco World Heritage site, the twin cities of George Town and Melaka have both lost their earliest five-star hotels. Ramada Plaza Melaka, formerly known as Renaissance Melaka, closed down in May last year.

“This shows how serious the adverse impact of the Covid-19 global pandemic has been on the local tourism industry,” Lim said.

He argued that Hotel Equatorial Penang’s closure has proven the ministry’s projected 58.4 percent hotel occupancy rate for 2021 to be patently absurd.

“Such false and unrealistic rosy projections will damage public confidence that the government knows how to do its job to save our tourism industry.

“Can the Emergency and suspension of Parliament help to save our hotels and tourism industry?” Lim said.