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Pandemic Outbreak: Resilience of Hotel Industry

Reports of cancellations mainly focused on the country' s entrances with Kuala Lumpur and Selangor collectively

took the majority, while popular destinations among Chinese such as Kota Kinabalu, Sabah and Langkawi, Kedah,

received direct attacks, losing all arrivals from China. Transit destinations elsewhere were also successful, with

Johor, Malacca and Perak losing most of their tourist arrivals.

Cancellation is just the beginning of a situation when hotels are also losing future demand with the world being

very cautious on the go. This is before many countries impose travel restrictions on their own citizens. Gradually

city to city, country by country, everything goes from travel advice to resolving obstacles.

Table 1: Hotel industry in Malaysia's umber of losses and room cancelation

Hotel demand is about to drop for April, May, June and finally for the third quarter of 2020. The decline in

demand led to a loss of revenue for the hotel while being burdened by high operating and operating expenses.

Hotels need to plan ahead and ensure their own survival.

ECONOMIC STIMULUS: IS IT BENEFICIAL TO HOTEL INDUSTRY?

Employment Retention & Wage Subsidy Program

The Employment Retention Program or ERP was introduced by the Government as a mean to help employees

forced to be placed on unpaid leaves. The ERP is limited to employees with monthly pay of RM 4000 or lower,

where RM 600 is disbursed to the employee through the employer for a maximum of six months. Employee must

be placed under unpaid leaves for minimum of 30 days in a month to qualify.

However, considering the minimum wage of RM 1200 set by the Government (for major cities), and fact that most

hotels are already paying employees more than that inclusive of allowances and incentives, RM 600 is seen as too

little for the employees.

A Wage Subsidy Program was subsequently announced by the Government, for businesses that had suffered more

than 50 % is losses of revenue since January 2020. Initially the program was limited to 100 employees at RM 600

per employee per month for a maximum of three months. Employers were also to pledge that these employees

would not be given any pay cut, laid off or be put on unpaid leaves for a duration of six months.