KUCHING: While some businesses have given the thumbs-up to the recently announced 2020 economic stimulus package aimed at offsetting the effect of Covid-19, concerns have also been raised over potential long-term issues.
Among various assistances, the economic stimulus package includes a temporary six-month discount of as much as 15 percent for electricity bills for hotels, travel agencies, airlines, and shopping malls. It also exempts hotels from charging six percent service tax on accommodation and other taxable services in the premises from March to August this year.
Olivia Ting, general manager and executive director of Meritin Hotel here, said that once implemented, the stimulus package would ease some of the burdens faced by the tourism sector.
“Electricity is one of the major concerns as hotels are 24-hour businesses. Despite having low occupancy, its public areas such as the lobby, toilets, and carparks are still required to be well-lit and accessible for safety reasons,” she told New Sarawak Tribune.
She said that the six percent service tax exemption would encourage travellers to take holidays while businesses would benefit by having sufficient cash flow to run their operations.
She said that cancellations at hotels reflected the immediate response to the Covid-19 situation, but the more worrying part was the drop in demand in coming months.
Citing the Malaysian Association of Hotels (MAH) nationwide survey, Ting said that massive cancellations had been seen in most states, including Sabah. “While the numbers reported for Sarawak are relatively low, people are taking precautionary measures by travelling less.”
She said that the general trend showed an average 30 to 60 percent drop in occupancy for states highly dependent on the Chinese market, while Sarawak was experiencing a 10 to 30 percent drop in occupancy.
“We are still tracking onward demand data, and we will compare that with past data to gauge the impact. The situation may change at any time. In the meantime, we can only hope for the best outcome,” she said.
Under such circumstances, she was of the view that offering discounts would be the best option at the moment.
“Taking into considering our overhead costs, employees’ welfare, and so on, we are currently experiencing supply over demand,” said Ting.
While Green Summit Development Group chief executive officer and executive director James Hii viewed the 2020 economic stimulus package as a good mitigation effort to reduce the burden of industries affected by Covid-19, he pointed out that this was a temporary financial measure.
“This RM20bil package could create more problems in the long run,” he cautioned, sharing his concern that this could contribute to the nation’s fiscal deficit.
“This in turn could cause other issues, such as pressure on our currency. Then, this would burden importers as they would have to spend more to cover the costs of foreign goods,” he said.
On the other hand, he said that the package would stimulate the economy by creating an indirect spin-off effect to other industries as well and not just those directly affected.
Hii hoped that after the current political turmoil, the government formed would be able to create a strong and healthy Malaysian economy.
Meanwhile, The Spring Management Services Sdn Bhd’s director of leasing and marketing Andy Song said they were glad to see many tourism incentives to encourage domestic travel, which could increase shopping footfall.
“Our continued focus is on cleanliness and giving our shoppers the right experience in a safe environment, which is our key to overcoming this pandemic,” he said.
He added that the option for all employees to reduce their Employees Provident Fund (EPF) contribution by four percent from April to December this year would give the public more discretionary income for retail spending.
