GEORGE TOWN: At least 20% of the 2,300 budget hotels in the country will shut their doors permanently unless the government steps in soon to help them through this lean period.
They want the government to fast track legislation that will protect them from legal action related to bad debts that have been incurred as a result of the Covid-19 pandemic.
Among others, the proposal is for amendments to existing legislation to prevent bankruptcy proceedings against an individual who is unable to settle debts during the Covid-19 crisis.
National Budget Hotels Association deputy president Dr Sri Ganesh Michiel said that despite the lifting of restrictions on inter-state travel, they have still not been able to attract guests.
Based on records, only prime destinations such as Langkawi, Port Dickson and Penang have seen an uptick in bookings for hotel accommodation. However, the figures may not truly reflect the actual increase in travel as many tourists opt for illegal home stays or Airbnb facilities, Ganesh said.
He said budget hotels, mostly rated three stars or below, are concentrated in cities.
The push for digitalisation has led to more business executives booking their hotel rooms through webinar applications such as Zoom, but such travellers do not normally check into budget hotels.
“Some of our members have registered occupancy rates of fewer than seven rooms per night. On the bright side, this is a little better than during the height of the movement control order when we did not sell any rooms.”
He urged the government to quickly push through the Covid-19 legislation that will shield businesses from some of the fallout of the pandemic. “Some budget hotel operators can’t even find the money to pay the rent.”
The proposed legislation calls for an amnesty period for businesses until the economy fully recovers from the fallout caused by the pandemic.
Ganesh said some of the budget hotel operators have received legal notices from owners of their premises. “They don’t understand our plight,” adding he wanted the tourism authorities to clamp down on illegal homestay operators. Such businesses have mushroomed in urban areas.
“They are taking away our business when we are the legitimate ones.”
Ganesh also wants action to be taken against online travel agents “who are bullying budget hotel operators” by not decreasing rates because they control the inflow of room reservations.
Read this story on our iPaper: Budget hotels in dire straits
