Findings and Discussion

Objective 1: To discuss the impact of the breakout of COVID-19 and the implementation of
RMO on the Malaysia hotel industry.

The outbreak COVID- 19 was triggered in the midterm of March and Malaysia had the
implementation of RMO which restricted all the foreign visitors and tourists into the country.
This brought a large impact to the tourism industry especially to the hotel industry.

Based on MAH（ The Star, 23 April 2020）, the visitors based on 2019 is 26.1 million and
with the top three contributors were Singapore (10.16 million), Indonesia (3.62 million) and
China (3.11 million) and Malaysia were highly dependent from these three main sources
which especially China which already started their lockdown enforcement from 23 January
2020 in Wuhan, China (Wikipedia, 2020)

It already brought a drastic bomb to the visitors to visit other countries which also indirectly
affected the income of the hotel industry in Malaysia. It worsen the situation by the outbreak
of COVID-19 in Malaysia which started the implementation of RMO started from 18 March
2020, based on the MAH, the local sector is projected to lose RM3.3 billion in revenue by
June 2020（ The Star, 23 April 2020 ）.The restriction of all the visitors to Malaysia and
restricted people to travel from state to state. It hit the hotel industry well as the domestic
travel were not allowed too.

Hotel Occupancy Percentage

350000 80.00%
66.99% 66.64% 68.10% 70.00%
300000 64.60% 65.24%
60.72% 59.99%
60.00%
250000
50.00%
200000
40.00%
150000 30.00%
30.00%
100000
20.00%
50000 10.00%

0 0.00%
2013 2014 2015 2016 2017 2018 2019 (projection)
2020

room ( supply) total occupy occupancy (%)

Figure 1: Hotel Occupancy Percentage in Malaysia based on Malaysia Association of Hotel (MAH)
From the Figure 1, the hotel occupancy percentage in Malaysia from 2013 to 2020
(projection). Even during 2019, the occupancy percentage had below 60% but it still
considered that the hotel industry was profitable. Based on MAH (The Star, 23 April 2020),
the hotels would not expect any profit which below the occupancy of 50%. As the projection
in 2020, the occupancy of the hotel was only 30%, there would be 30% if the total of 4880
registered hotels in Malaysia ( Tourism, Arts and Culture Ministry, 2020) which would be
1464 hotels expected to be temporarily or permanently closed down.

When the industry itself had faced problems, so the staff and the employees of the hotel
would also be affected. As of March 2020, the local hotel industry laid off the workers with
further unpaid leave and wage cuts as the sector struggled on the effects of COVID-19
pandemic (Malaysian Association of Hotels,2020). According to the report of The Star, the
local hotel industry had laid off 4% of its employees as March 20, which was only the early
stage of the implementation of RMO.

State total employees pay cut lay off unpaid leave

Johor 3215 108 72 202
Kedah 692 0 0 80
Kuala Lumpur 17826 2880 542 3641
Melaka 1872 65 85 191
Negeri Sembilan 1452 0 130 179
Pahang 1464 0 231 150
Penang 5549 240 84 430
Perak 1654 91 245 595
Sabah 4934 893 177 1075
Sarawak 3488 175 92 258
Selangor 7981 134 238 1812
Terengganu 1298 52 53 101
total 51425 4638 1949 8714

(Source: www.thestar.com.my)

From the table, it was clear that there are total of 51425 employees were involved in the study
of the 12 states in Malaysia based on the report in The Star newspaper, whereas 9.02% of
them which is 4368 of them had a deduction in their salary, 3.79% of them which is 1949 of
them lost their job, and 16.95% of them which is 8714 of them would had unpaid leave
during this critical period. Kuala Lumpur was the most affected state which there were 7063
of the people amongst a total od 17826 employees were affected which were 39.62% of the
employees were affected.
In summary, it was clear that hotel industry was facing a drastic challenges that never before
during this critical time period and some steps should be carried out to help the hotel
industry.