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Malaysian tourism sector hit by SARS crisis
( 2003-05-16 15:41 ) (8)

The outbreak of Severe Acute Respiratory Syndrome (SARS) is the biggest tragedy affecting the Malaysian tourism industry, Tourism Minister Abdul Kadir said recently.

SARS has cut deep into the country's travel and hotel industry which contributed 67 billion ringgit (17.63 billion US dollars) to the national economy in 2002, a local daily reported.

There has been a drastic drop in tourist arrivals in the country in recent months with some 600,000 arrivals last month compared with over one million in January, 985,300 in February and817, 200 in March, due to travellers' fear of SARS, according to the report.

The actual number of confirmed SARS cases in Malaysia to date is relatively small. There have been seven probably cases and two deaths. But even as the situation may seem contained at this point,one simply can not tell if it could worsen or otherwise.

In the hotel sector, the occupancy rate has dwindled to 25-30 percent in April, with an exception of a few hotels that managed to fill up almost half of their rooms, the Malaysia Rating Agency said.

Generally, the hotel occupancy has come down drastically by 40 percent in the past months, it added.

If the situation is protracted, many hotels, particularly the independently-owned hotels with inadequate cash reserves, will be forced to fold, said R. Nekvapil, vice-president of the Malaysia Association of Hotels.

Some hotels may consider laying off staff but currently hoteliers are asking staff and workers to work for shorter hours and fewer days in a week, R. Nekvapil said, adding this could happen in another six to nine months.

Echoing R. Nekvapil's sentiments, Tan Boon Lee, president of the Malaysia Association of Hotels Owners (MAHO), said, "the hotelindustry has been devastated by the SARS virus and at this level, all hotels will need to address staff numbers and costs."

The tourism sector with 2,031 hotels is the country's second largest foreign exchange earner and also the country's largest employer. To date, some 37 billion ringgit (9.73 billion US dollars) has been invested in the hotel industry that employs about 67,000 staff and workers.

A nine-point proposal has been submitted by hoteliers to the government to help them go through this rough patch, mostly aimed at reducing the cost of operations, Tan said.

It includes deferment of 5 percent government tax for a year, reduction of lending rates as well as utility charges, according to Tan.

The government is not likely to take their plight lightly. It is reported that the government is in the midst of preparing a stimulus package, which is expected to contain substantial measures to lift the tourism and hotel industry out of its currentcrisis.

Deputy Prime Minister Abdullah Badawi has urged the private andpublic sectors not to postpone or cancel conference and seminars, rather they should bring them forward to support the travel and hotel industry to survive the SARS crisis.

He has also called on the affected industry to look for other markets such as the Middle East to boost their occupancy rates.

Meanwhile, the tourism minister urged Malaysians to travel within the country during the upcoming school holidays to boost domestic tourism.

"The Malaysians should come together to help improve the situation of the tourism industry," he added.