WITH half the year gone, the hard-hit hospitality sector is hopeful that 2022 will be a much better year for the industry.

       According to the Malaysian Association of Hotels (MAH) in its latest hotel industry survey report (as at June 14), key to the industry moving forward will be highly dependent on the national immunisation programme achieving herd immunity.

       “At the current rate, although the Covid-19 Immunisation Task Force has managed to ramp up vaccination rates, Malaysia is still far from its objective of 80% inoculation.

       “Nevertheless, the hotel industry, having pushed its recovery plans further, is now hoping 2022 will be the year for the industry to commence recovery.”

       Having witnessed progress in other countries, MAH is hopeful that Malaysia will be better prepared in 2022 and will likely be able to move forward.

       Still, the association forecasts average occupancy of 35% for 2022, which would indicate another year of losses.

       Until then, however, MAH chief executive officer Yap Lip Seng (pic below) is hopeful that the government’s recently announced National Recovery Plan will allow industries to plan ahead and make essential decisions moving forward.

       MAH chief executive officer Yap Lip Seng

       “Industries have been patient for more than 15 months by now, especially the tourism and hotel industry, being the first to be impacted and expectedly, the last to recover.

       “On a larger perspective, even the best case scenario laid out in the recovery plans indicates the earliest reopening of tourism activities and interstate travel is by the end of the year, which is six months away with the entire 2021 exhausted.”

       Yap says stakeholders would argue that the current scenario is not about being patient, but rather survival.

       “Having sustained losses for more than a year now, it will not be able to endure another six months.

       “This will likely result in more hotels closing and more people losing their jobs if there is no additional assistance from the government.”

       Yap is hopeful that with the recovery plans now in place, the government will initiate better and more targeted assistance packages for sectors that are unable to sustain on their own through the different phases.

       According to MAH’s hotel industry survey report, out of 320 hotels surveyed, two have permanently closed down while 91 are closed temporarily as at June 2021.

       “By percentage, almost 71% are still operating, most of which are dependent on quarantine needs, while others are catering to guests from the essential services sectors.

       For 2021, the association expects average hotel occupancy rates to increase from 14% in June to 28% by the fourth quarter of this year.

       “The industry was expecting domestic driven recovery by mid of 2021 and high hopes of reopening international tourism by the third quarter of 2021.

       “When asked what is expected of the third and fourth quarter of 2021, hotels are putting hopes for occupancy levels of 21% and 28% respectively. This puts 2021 at an average of 23%, an unprecedented yearly low, even when compared with 2020 when the pandemic first hit.”

       MAH says the average daily rate (ADR) for 2021 is expected to remain at the range of between RM180 and RM190, which on average represents a drop of between 20% and 30% compared with pre-pandemic levels.

       “It must be noted however that the industry did not register sufficient rooms sold to indicate its actual loss in ADR.

       “Mid-to-upper luxury hotels had indicated a drop of at least 50% in average rates, having lost all international markets typically of higher spending power.”

       Meanwhile, Deloitte in its paper “The future of hospitality: Uncovering opportunities to recover and thrive in the new normal, ” says trust will play a pivotal role in enabling the sector to recover and rebuild in the near term; and thrive in the long term.

       “Every hospitality-sector business will need to actively engage with consumers and communicate the steps they’re taking to keep customers and employees safe and demonstrate how they’re living up to those commitments at every point of interaction.

       “Companies that adapt their offerings to reflect changing preferences and behaviours demonstrate their desire to listen, understand and respond to their customers. In the near term, this can help deepen consumer trust in the organisation, fostering the kind of bond that can drive future growth and success.

       “Consumers will remember the brands that paid attention and “took care” of them.”

       Deloitte says organisations must do all they can to not only provide a clean space for customers, but also one that alleviates their health-related worries.

       “Authorities will continue to require businesses to adhere to certain guidelines, but it’s incumbent on the organisations to implement those rules in a way that both fits their business and takes away as little as possible from the customer experience.”

       Deloitte says all hospitality organisations will want to adopt rigorous, frequent cleaning and sanitation protocols and require the use of masks in public areas.

       “Businesses welcoming especially large numbers of people will likely want to introduce temperature checks at entry or before service and possibly track-and-trace measures.”

       Deloitte emphasises that the hospitality sector will need to find new ways to do business.

       “Traditional business and operating models have taken a beating amid the pandemic and the ensuing lockdown.

       “Organisations that relied on packed gaming tables, full dining rooms, sold-out arenas or a steady stream of tourists, business travellers, wedding guests and conventioneers must now find a way to do business without the usual crowds.

       They need to pivot toward new offerings that make sense for their customers and their business.”

       Additionally, Deloitte says organisations in the hospitality industry will need to rethink their staffing needs in a world of physical distancing and fewer customers.

       “The new normal may no longer support pre-pandemic staffing levels and companies may need to look at reducing staff or reassigning employees to other roles.

       “Yet at the same time, they may find themselves dealing with sudden changes in customer volume for reasons related to Covid-19.

       “An outbreak could suddenly require restaurants and other establishments to be closed temporarily, for example, or re-imposed travel restrictions could mean hotel guests don’t show up for their reservation.”

       To deal with this, Deloitte says organisations may want to make more use of flexible or contract staff, or third-party service providers so that they can quickly respond to changing business conditions and staff up or down as needed.

       It adds that technology can help alleviate operational burden and promote safety.

       “Adhering to authorities’ Covid-19-related health and safety rules and addressing customers’ health worries represents a significant burden for hospitality companies, especially as they may be unable to operate with typical staffing levels. Technology can help ease this burden.

       For example, hotels, casinos, and sports venues might wish to explore the use of non-invasive thermal scanning technology to monitor incoming customers for signs of fever and alert staff to intercept potentially ill individuals before they can enter the premises.”