Friday, July 30, 2021

Tourism industry isn’t out of the woods yet

More agile planning is needed to help the tourism industry navigate the Covid-19 crisis.

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We thank the government for some of the assistance in the Pemulih stimulus package that has been extended to the tourism industry: the one-off payment of RM3,000 for the 5,335 tour agencies involving an outlay of RM16 million and the exemption for tourism tax and service tax until the end of this year.

We don’t need the 11th-hour announcements – we need to be agile in our planning

The shift from time-based MCOs to the phase-based approach in the National Recovery Plan, though welcome, comes with a caveat. It is not time-bound – the mention of months there is only indicative and not a mandatory milestone to cross for the transition from one phase to the next.

The three determinants – absolute number of daily Covid cases, healthcare capacity and vaccination rates – are dashboard figures. They don’t reflect the real situation. Why not tailor this data out to a geographical system? According to what the National Immunisation Plan has announced, the Klang Valley will reach herd immunity first in Peninsular Malaysia. If those three pre-determined criteria are reached, why not allow the Klang Valley to migrate to Phase 2 and beyond where all the required indicators have been fulfilled?

And that is not good for business. We need planning and to plan, the government needs to provide a stable ecosystem. We support the measures taken to break the chain and reduce Covid infectivity, but we need a clear milestone and an agile SOP and plan in place. Now everything is ad hoc.

Tourism was the third biggest contributor to Malaysia’s GDP, after manufacturing and commodities. In 2018, this sector’s direct contribution was 5.9% to the total GDP. The tourism industry as a total is estimated to contribute about 13.1% to 14.2% of the total GDP of our nation. Since the start of the pandemic, the total Malaysian tourism industry has already lost RM100 billion.

Following the NRP, we see the tourism industry only being allowed to operate in October 2021 at the earliest. Until then many are already shuttering their businesses – permanently, we are afraid. There can’t be a comeback for many of these business owners whose cash reserves, investments and everything the business stood for have evaporated in a long haul of over 16 months.

What do we seek?

Our proposal: At least allow the tourism industry’s core businesses – theme parks, attractions, playlands, spa wellness, cinemas and family entertainment centres to open together with shopping malls, resorts and hotels in Phase 2 of the NRP. These businesses need to at least claw back something when we see domestic tourism returning and movements become less restricted.

Impact: As a result of the pandemic, tourism receipts – the country’s third-largest revenue contributor for 2020 – plunged 80.9% to RM12.6 billion from RM66.1 billion in the previous corresponding period. We can at least see some of that returning to churn the lethargic domestic economy. We must not forget that the Malaysian GDP is 70% domestic based – we need to return the economy into a higher gear.

What is the alternative?

We are strongly urging the government to draw up a tourism recovery plan in the immediate and medium-term. Let’s work together with the private sector to make this happen. Let us use the best practices that have been adopted in various other countries like Thailand and Europe. The alternate consequences are taking a very heavy toll on our economic structure considering that tourism is the third largest GDP contributor.

No one has been spared in the tourism industry. In 2019, employment in the tourism industry recorded 3.6 million persons (2018: 3.5 million) which contributed 23.6% (2018: 23.5%) to total employment. Food and beverage services and retail trade were the main industries in tourism employment with a share of 34.7% and 32.5% respectively. Both sub sectors cumulatively contributed 67.2% to total tourism employment.

What happens to these thousands of businesses and the 3.6 million people that we employ? We ask the government to address some of these issues as a part of the tourism recovery plan.

We have a 3-pronged approach:

1. Financial support and easing of cash flow
2. Statutory exemptions
3. Proactive and inclusive action on the SOPs

1. Penjana tourism financing

We appreciate the government having allotted RM1 billion Penjana tourism sector financing to help SMEs and micro SMEs affected by the Covid-19 pandemic. However, the programme remains a low-impact initiative. According to the latest 57th Laksana report, only 6.5% was utilised – as of June 4, there were 666 applications for this funding, and out of the total, 327 applications were approved with total funding of RM65.1 million.

We seek a straightforward programme to be managed and distributed by a single agency under Motac – now it is vested in the hands of 12 commercial and development banks. We need a converged single-window management of this fund.

2. Statutory and utilities

a. Freeze all statutory needs until Dec 31, 2021.

b. There are tourism-specific related statutory issues like annual licence renewals and routine vehicle inspections for commercial tourist buses.

c. Includes but not limited to EPF, Socso, EIS, SST, quit rent, assessment, SSM submissions, LHDN instalments, HRD, foreign worker levy payments etc.

3. Proactive and inclusive in terms of SOPs

a. Let’s work on the SOPs themselves – what should be the SOPs, which ones need to be tighter – shorter operating hours, larger footprint (increase floor area/pax), lower customer traffic, wider distance, stricter SOPs, and any punitive measures that are to be outlined.

b. Let the private sector work alongside agencies/ministers and the National Security Council to make this happen.

c. Maximise the potential of MySejahtera and Hotspots Identification for Dynamic Engagement (HIDE) for proactive measures. HIDE needs to be more transparent with the people knowing what parameters are being measured. It cannot be punitive, but rather incentivised to use.

d. Let Motac be the anchoring ministry for these initiatives.

We again seek that the core of the tourism industry – theme parks, attractions, playlands, spa wellness, cinemas and family entertainment centres – be allowed to open together with shopping malls/resorts and hotels in Phase 2 of the NRP.

But if the government still makes a widespread decision to keep all these sectors on the negative list and hence unable to operate, this is something we are asking the government must compensate – especially in the aspects of financial aid, accelerated wages subsidy, operational cost, statutory leave, utility discounts and tax obligations.

Otherwise, if we have to keep costs at the pre-pandemic level, without retrenching workers and yet matching with zero revenue, that is bad business and bad for business.

We as an industry that has yet to come out of the woods are still hopeful. This stems from the fact that Prime Minister Muhyiddin Yassin has acknowledged that the tourism industry is the hardest hit. Hopefully, the government will reciprocate in the same spirit and provide more forthcoming funding help to the tourism industry.

Richard CK Koh is president of the Malaysian Association of Theme Park and Family Attractions.

The views expressed in this article are those of the author(s) and do not necessarily reflect the position of MalaysiaNow.

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