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Many businesses may close without govt help

14 Jan 2021 / 12:03 H.

PETALING JAYA: Many businesses that have been major drivers of economic growth may now go under unless help from the government arrives soon.

They are the retail, hospitality, food and beverage sectors, which also happen to be the worst-hit by the Covid-19 pandemic and subsequent economic fallout.

The Malaysian Association of Hotels (MAH) warned that most hotels will be forced to close down and lay off staff if the government does not intervene, while the Malaysian Retail Chain Association (MRCA) fears that the second movement control order (MCO 2.0) may just be the final nail in the coffin for small businesses such as beauty salons, spas, theme parks and cinemas.

The Malaysian Food and Beverage Executives Association (MFBEA) said many businesses in the sector were already getting back on their feet but the current lockdown will likely pack them away for good.

MAH president Yap Lip Seng told theSun that at least 6% of hospitality industry staff have been let go previously.

“Those who have not lost their jobs will have their salaries reduced or be forced to take unpaid leave. Compared with March last year (when the first MCO was enforced), we are worse off, and we expect a bigger impact this time.”

He urged the government to take up MAH’s proposal of a 50% wage subsidy for those earning up to RM4,000, and 30% for those earning up to RM8,000 a month.

“This has been proven (to be effective) in other countries and is crucial for the industry’s survival.”

MFBEA president Hisham Tan Abdullah said restaurants that do not offer takeaways will shut down if the MCO lasts beyond two weeks.

Hisham said many proposals for remedial action have been sent to the authorities, but there has been no response.

MRCA said for small businesses, cost-cutting measures such as salary reductions and downsizing will not be enough to sustain operations.

Meanwhile, Malaysian Muslim Restaurant Owners Association (Presma) president Datuk Jawahar Ali Taib Khan said the full impact of the MCO on businesses may only be known after Sunday but many are already feeling its effect.

He said that on the first day of the MCO yesterday, restaurants saw an 80% drop in breakfast business. “The loan moratorium has ended and with the new round of MCO, many restaurants will have problems meeting their debt obligations as well as their payroll.”

Jawahar said 20% to 30% of Presma members have decided to call it quits.

Malaysia Budget Hotel Association deputy president Dr Sri Ganesh Michiel said budget hotels are still recovering from the previous lockdown.

He said although people are allowed to stay in hotels, with interstate travel banned, it would be difficult to get customers.

“During the Christmas and New Year festive seasons, most hotels would normally see near full capacity but last year, it was only 30%.”

Small and Medium Enterprises (SME) Association of Malaysia president Datuk Michael Kang said a number of members have already informed him that they would be shutting down for three to six months before deciding how to move on. “Many SME were on the slow road to recovery before the MCO announcement. Although allowed to operate, they are finding it hard to get customers.”

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