Coronavirus: 5 hotels in Penang, 2 in Perak shut down amid prolonged movement curbs

(Top left, clockwise) Jazz Hotel, Jerejak Island Resort, Hotel Penaga and Kinta Riverfront Hotel & Suites have announced they will close. PHOTOS: FACEBOOK PAGES OF JAZZHOTELPINANG, JEREJAKISLANDRESORT, KINTARIVERFRONTHOTEL&SUITES, HOTELPENAGAOFFICIAL

GEORGE TOWN (THE STAR/ASIA NEWS NETWORK) - The hotel industry is facing the full brunt of the Covid-19 pandemic and the prolonged movement control order (MCO).

At least three hotels in Penang - Jazz Hotel, Hotel Penaga and Jerejak Island Resort - along with the Kinta Riverfront Hotel & Suites in Ipoh, Perak, have announced that they will wind up this week.

The employees have been informed that a compensation package was being worked out for them, with the last working day being Thursday (April 30).

"The opportunity to regain the losses was made impossible with the implementation of the MCO since March 18," a circular stated.

Tuesday was the 42nd day of the movement curbs, which have been extended three times since the first two-week MCO was announced on March 18.

The Edge Markets newspaper meanwhile reported that Plenitude Bhd, in a Bursa Malaysia filing, revealed that the company was was closing its hotels with immediate effect - Mercure Penang Beach and The Gurney Resort Hotel and Residences in Penang, and Travelodge Ipoh in Perak.

Malaysian Association of Hotels chief executive officer Yap Lip Seng said that based on a survey involving 324 hotels in the country, 15 per cent said they might consider closing down permanently, with 35 per cent considering a temporary closure.

He said 93 per cent of the respondents said their hotels needed a minimum of six months' wage subsidy to stay afloat, with 74 per cent asking for a higher government subsidy.

Mr Yap said the industry was seeking a minimum monthly subsidy of RM1,200 (S$390), or 50 per cent of the salary, for each employee earning RM4,000 and less, with the subsidy to last till December.

"This will enable employers to maintain their workforce through the period and sustain the industry," he said. "There must also be a 30 per cent subsidy for those earning between RM4,000 and RM8,000 a month. "

Mr Yap also said home-sharing operations such as Airbnb must be stopped to enable the recovery of the tourism sector in Malaysia.

He said this was because the platform had been operating quite differently from other locations in the world.

He said Airbnb last reported over 53,000 listings in Malaysia, adding that this would further dampen the local hotel industry.

"Most cities and countries around the world had imposed regulations on it. In Malaysia, home-sharing can be operated freely, benefiting high-income earners who can afford a second or third home.

"Other than displacing locals from major cities, the business model has also caused inflation and increased rental rates. The government must place priority on tax-paying businesses that support the employment of locals, especially in times like these," he added.

Malaysia Budget Hotels Association president Emmy Suraya Hussein said 15 per cent of their 2,300 members had already announced a temporary closure until the situation returned to normal.

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