Hotel Closures Increase Johor Baru Hospitality Sector Worries

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Reception counters at hotels in Johor Baru are forlorn looking. NSTP/VINCENT D’SILVAJOHOR BARU: News that 5-star Equatorial Hotel in Penang will bring its curtains down on March 31 and that Shangri-La in Batu Ferringhi is offering a VSS package to its employees has sent chill winds down the back of the hospitality industry in this state capital.
This city has long benefited from its close proximity to Singapore, but from the onset of the Covid-19 pandemic a year ago, tourists from the city-state have all but dried up because of the halt in across-the-causeway travel.
As a consequence, the hospitality industry here has withered on the vine.

MAH Johor chapter chairman Ivan Teo. NSTP/VINCENT D’SILVA
Ivan Teo, chairman of the Johor chapter of Malaysian Association of Hotels (MAH), said the news from the north has "sent chill winds through the hospitality industry here in the south, but it comes as no surprise."
"Most of us hoteliers in JB (Johor Baru) are just coping in very challenging circumstances, but the news about Equatorial and Shangri-La increases the gloom and pessimism that has enveloped the industry," he said.
"Even before the pandemic, we found the going difficult because of the mushrooming of the AirBnB sector, which has eaten into our business," said Teo.
He said tourism is the main source of income for the hospitality industry, and that without a new blueprint for boosting tourism, there can be "no light at the end of the tunnel."
"Hotels are a long-term investment. We cannot have a short-term solution to a long term investment," he said.

General manager of Grand Paragon Hotel Yeo Siu Ling. NSTP/VINCENT D’SILVA
"We need a solid blueprint moving forward to be able to compete with neighbouring countries. On top of that, we require basic facilities, logistics, and manpower to be properly planned out," he explained.
He said that tourism is not just about price and location, adding that "the whole experience of good tourism requires many non-governmental organisations (NGO) working as a team to nail our weakness and get ready for a new Malaysia after Covid-19."
While Teo held forth on the macro-view of the industry, Yeo Siu Ling, general manager of the Grand Paragon Hotel, dwelt on the micro aspects of survival.
"We try to stay afloat by cutting costs in every way, and are very prudent in our purchases and expenses. We create many menus for takeaway, as no dine-in is allowed at the moment, we see the potential business in takeaway," said Yeo.
"We predict the situation will not be better till the third quarter (of 2021) or even first quarter of 2022. More hotels might make the drastic decision by maybe closing the hotel temporarily or permanently," she added.

General manager of Pulai Springs Resort Sunny Soo. NSTP/VINCENT D’SILVA
Yeo welcomed any kind of subsidy or rebate or discount that the government has offered the industry.
"The 10 per cent rebate on electricity is welcome, but it would have been better if the previous rebate of 15 per cent was maintained as electricity is our highest operating cost."
Yeo said the biggest boost to the waning hospitality industry would be if the "border to Singapore can be opened, as it is our main source of business."
Another hotelier, Sunny Soo, general manager of Pulai Springs Resort, said that except for hotels that are in a good location and are doing quarantine business, "the rest are dying."
"Most hotels in JB have decided to jump on the food delivery bandwagon in a bid to survive and increase cash flow. But then again, it's not easy, as we are forced to lower the price to compete with other food providers. With such low price, the cost is high, and hence we have a very low-profit margin," he lamented.
Soo said he appreciates what the government is trying to do by providing a 10 per cent rebate on electricity charges.
"But with a very low number of guests checking in, restriction on food & beverage businesses and so many facilities having been shut down during the MCO, we are not consuming a lot of electricity. Therefore, the 10 per cent savings is only a small amount of money," he sighed.
He urged the government to seriously look into and study the needs of the tourism and travel industry and initiate more help to them. - NST

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