Extreme measures needed to save tourism industry in 'extreme distress', says MATTA

Extreme measures needed to save tourism industry in 'extreme distress', says MATTA
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KUALA LUMPUR (Jan 14): The Malaysian Association of Tour and Travel Agents (MATTA) has urged the government to be proactive and come up with an enhanced and targeted rescue plan for tour and travel agents in light of the recent announcement of the movement control order (MCO) and the bleak forecast for travel this year.

MATTA president Datuk Tan Kok Liang said tourism businesses are currently in extreme distress due to the very fragile and uncertain business environment that is expected to continue late into 2021.

“Tour and travel agents have been battling with collapsing revenue and liquidity problems since the start of the [Covid-19] pandemic, and the government’s efforts have not made any significant impact on this segment of the industry,” he said.

Tan pointed out that tour and travel agents are essential to Malaysia's economy as the majority of these businesses contribute significantly to inbound traffic into Malaysia in the form of both leisure and business travellers.

Many agencies also provide crucial logistics services and maintain fleets of buses and other tourist vehicles vital to tourism infrastructure of the country, he added.

He noted that tourism also plays an important part in contributing to national gross domestic product (GDP) and it was the third-largest contributor over the past years.

According to Tan, the industry supplied 14.1% (RM166 billion) of the country's GDP in 2015, 14.5% (RM182 billion) in 2016, 14.6% (RM201 billion) in 2017, 15.2% (RM220 billion) in 2018 and 15.9% (RM240 billion) in 2019.

“For 2020, the Covid-19 pandemic vastly affected the tourism industry with an estimated total loss exceeding RM100 billion,” he said.

While the hotel industry expects more hotels to close or wind up due to the second phase of the MCO and continuous closure of borders, he said more travel agents, especially those owning tourism vehicles, are very likely to face the same fate as the hoteliers.

“Tourism businesses are expected to suffer more losses, and the government must provide an extension of the loan moratorium and enhanced wage subsidy programmes until June 30, 2021.

“Relief on rental, insurance and statutory licensing fees are also needed to help those who are affected, especially the SMEs which have already had to burn a lot of cash just to survive the last MCO,” he said.

MATTA also urges travel businesses to go for consolidation and mergers.

According to the association, over 5,000 travel companies are now in “ICU” (intensive care unit) condition and the government needs to initiate rehabilitation programmes as the situation gets worse.

“Allowing travel agents to close business premises and operate from home and the cancellation of the mandatory Travel and Tours Enhancement Course (TTEC) programme for travel companies would be good gestures of support,” said Tan.

MATTA also urged employees of travel agencies to go for reskilling during this challenging time, though the association was disappointed that the government did not allocate funds for reskilling tourism workers at large apart from the 8,000 aviation workers as announced in Budget 2021.

“It is also imperative for the government to resolve the issues of deposits held by airlines and related service providers, make urgent corrections to the [outdated] Tourism Industry Act 1992 and provide flexibility of approval for conversion of tour buses into other categories in order to allow these buses to be utilised for other purposes  — these are practical measures that the government needs to assist [in providing them],” he said.

He also noted that the tourism sector had been burdened by bureaucracy and over-governance affecting the industry's regional and global competitiveness.

Overlapping jurisdictions of multiple government agencies stifled the industry over many years, he added.

“It is no longer 'business as usual' under the Covid-19 pandemic and we urge the various government agencies to make immediate policy changes to ease the financial burden of the hardest-hit industry in Malaysia,” concluded Tan.

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