Covid-19 has and will continue to have a significant impact on many industries. The travel industry is no exception, and in fact, maybe the hardest hit. Due to the severity of the Covid-19 pandemic, the government has implemented the Movement Control Order (MCO) on 18 March 2020 as a preventive measure to curb the spreading of the virus. The Malaysian government has declared that hotels could no longer accept guests, while non-essential service such as spas would have to be closed throughout the period.
At the same time, many countries started to implement travel restriction to Malaysia, which resulted a loss of RM68 mil in revenue with 170,085 room bookings cancelled, according to the Malaysia Association of Hotels (MAH). While the cancellations of hotel were mainly from the China market, there were also reports of cancellations from the domestic market, Singapore, Hong Kong, Taiwan, Vietnam and Europe. Meanwhile, South Korean cancellations increased after its government issued an advisory against travelling to Malaysia.
According to MAH, as of now, 2,041 employees of the industry had been laid off due to economic pressures and the extended MCO, while 9,773 were given unpaid leaves and another 5,054 had taken pay cuts.
Sources by MAH R&D Occupancy Survey, click here.
Painting a dismal outlook for the sector, the MAH is projecting a revenue loss of RM560.72 mil during the MCO period, with occupancy rates projected to fall to a dismal 11% from 32% during the middle of last month.
OECD outlook on Covid-19 Pandemic
OECD Secretary General Angel Gurría, in preparation for the G20 Virtual Summit, unveiled the latest OECD estimates showing that the lockdown will directly affect sectors amounting to up to one third of GDP in the major economies. For each month of containment, there will be a loss of 2 percentage points in annual GDP growth. The tourism sector alone faces an output decrease as high as 70%. Many economies will fall into recession. This is unavoidable, as we need to continue fighting the pandemic, while at the same time increasing efforts to be able to restore economic normality as fast as possible. For more information on “New OECD outlook on the global economy” click here.
UNWTO outlook on Covid-19 Pandemic
UNWTO estimated a global impact from Covid-19:
- – 290 to 440 million International Tourist Arrivals
- 5 to 7 years lost in number of tourists
- – 300 to 450 US$ bn Tourism Exports (receipts)
- 1/3 of 1.5 US$ trillion lost in Tourism Exports
For more information on “Impact assessment of the Covid-19 outbreak on international tourism” click here
SERVICES STATISTICS DIVISION 