Photo : Liew (4th right) with Pan (right), Dr Jamili (3rd left), Noredah (2nd left), Mustapha (left), Tan (3rd right) and tourism
industry players.
KOTA KINABALU: Deputy Chief Minister Datuk Christina Liew said she will bring to the attention of the State Government the concerns raised by tourism industry players, hoteliers, airlines and other stakeholders over the negative impact of the COVID-19 pandemic.
She gave the assurance at the recent Tourism Industry Engagement Session hosted by Sabah Tourism Board (STB) and moderated by its General Manager, Noredah Othman.
“I understand the predicament facing the tourism industry. I will relay the recommendations from today’s brainstorming meeting on how to mitigate the effects of the pandemic, to the Government for its consideration,” said the Minister of Tourism, Culture and Environment who chaired the session.
President of the Malaysian Association of Tour and Travel Agents (MATTA), Datuk Tan Kok Liang started the ball rolling by highlighting the need to boost travellers’ confidence and push for domestic tourism as part of market recovery measures. He said this can be achieved through health accreditation and standard operating procedures (SOPs).
“By health accreditation, I mean consistent application of health and safety protocols to restart the travel and tourism industry. We should promote taglines like Stay safe and Safe travel, instead of telling Malaysians to Stay at Home.
“I believe in consistent adoption of SOPs by airlines, hotels, transporters, tourism attractions, cruises, food and beverage outlets, and retails, among others. These SOPs would help the industry to adhere to the standards and build confidence for both locals and tourists,” he explained.
On domestic tourism, Tan emphasised the importance of consistent communication with travellers to ensure that it is safe to travel locally, adding the market segment is targeted at the 1.2 million civil servants in the country. “It is imperative that the Government prioritise domestic travel to invigorate the whole economy through spin-off effects in the value chain.”
To make things happen, he called for smart partnership with airlines, hotels and tourism companies in providing affordable airfares and flexibility in bookings and reservations, and coming up with attractive tour packages.
Still, the MATTA President contended that domestic tourism is not adequate in revitalising the tourism sector, prompting him to advocate the concept of travel bubble. “As nations look to ease travel restrictions, we can explore safe travelling routes with the countries that have effectively contained the spread of COVID-19. We can establish international travel under the ‘Green Lane’ concept, with countries in ASEAN, China (Southern China), Taiwan, Macau, Hong Kong, Japan, Vietnam and Australia,” he suggested.
While conceding that the tourism industry was generally concerned with the provision of financial relief to ease cash flows, especially on the wage subsidy and employment retention programme, Tan was of the view that it appears to be not effective.
“One of the biggest focuses to sustain the tourism industry is ensuring cash flow as travel agencies are seeing a 90pc decline in revenue from September 2020.
“With the Recovery Movement Control Order (RMCO) extended to August 31, 2020 and restrictions on easing of border, it means that a majority of SME tourism companies that specialise in foreign inbound tourists, transportation, ticketing and outbound tourism have zero revenue for six months.
“As such, it is likely to take at least 12 to 24 months for containment, stabilisation and recovery before people and businesses can return to normalcy,” he told the session.
In this regard, Tan pressed for a further enhancement of the financial assistance package “as businesses are struggling to survive due to severe cash flows, absence or a sharp dip in revenue, and high overhead expenses.”
He also expressed the hope that the State Ministry of Tourism, Culture and Environment (KePKAS) can provide direct funding to Sabah-based tour operators.
The MATTA President also called for an extension of the stimulus package that provides a temporary relief for B40s and to address the issue of staff retention and avoidance of the possible retrenchment of a further one million employees within the tourism industry.
“For Sabah, the workforce is more than 30,000 employees. The rising number of retrenchments would not only cause hardship to households but would also inflict downward spiral effects on domestic demand and would grind the economy to a halt,” he pointed out.
MATTA is the nation’s leading travel association that represents the interests of more than 3,600 licensed travel agents (licensed by the Ministry of Tourism, Arts and Culture (MOTAC).
Meanwhile, Chairman of MATTA Sabah Chapter, Lawrence Chin said the chapter is seeking the State Government’s aid to mitigate the severe financial repercussion caused by the COVID-19 pandemic.
“We also propose a RM10,000 direct fund injection per licensed company to defray urgent overhead payments, utilities and rental payments. We hope the Ministry of Tourism, Culture and Environment can provide direct funding as a ‘gesture of goodwill’ and encouragement to
Sabah-based tour agencies and operators,” he said.
According to Chin, tour operators and travel agencies have been badly hit with regulatory constraints, travel restrictions and lockdown in place from March 18.
“We are experiencing practically nil revenue from March to September 2020,” he lamented. “However, we are maintaining our staff with the hope that the travel industry will rebound by 2021.”
Since 1990, MATTA Sabah has been working closely with the Sabah Tourism Board (STB) and Tourism Malaysia (TM) to promote Sabah. Currently, it has 570 active travel agencies and tour operators throughout the State.
The Sabah Association of Tour and Travel Agents (SATTA) proposed that for starters, a charter flight be organised to bring in Chinese entrepreneurs, cultural and Chinese associations from China to kick-start international tourism post-COVID-19.
Its President Datuk Seri Winston Liaw said this would be one way to convince the whole world that it is safe to travel to Sabah.
“We can publicise this widely through Phoenix TV and social media platforms. We can invite the Consul-General of the People’s Republic of China in Kota Kinabalu, the Federation of Chinese Associations Sabah (FCAS), Kota Kinabalu Chinese Chamber of Commerce and Industry (KKCCCI) and SATTA to participate in the charter flight,” he said.
Meanwhile, Liaw suggested that the loan moratorium period be extended for another six months while urging the Government to consider providing direct injection of funds in the form of a subsidy or grant to owners of travel agencies. “It could be a sum of RM10,000, RM20,000 or RM30,000, depending on the size of the company.”
Also present were STB Chairman Ken Pan Ying On, the Ministry’s Permanent Secretary Dr Jamili Nais, STB General Manager and Liew’s Political Secretary Mustapha Sakmud.
Side Bar : MATTA’s Recommendations to the Government
1. Wage Subsidy Programme
  a. To extend the support period until Dec 31, 2020.
  b. To increase the allocation for the programme from RM1,200 to RM2,000.
  c. To review and waive the stringent qualifying criteria, terms and conditions in terms of salary scale, employees and staff retention period.
2. Employment Retention Programme (ERP)
a. To extend the period until Dec 31, 2020.
b. To increase the financial aid of RM600 per employee to RM1,200.
3. Employer’s Statutory Contribution
  a. To suspend contributions to Employees Provident Fund (EPF) by both employers and employees from June 1, 2020 to Dec 31, 2020.
4. Special Relief Facility (SRF)
  a. To monitor the approved disbursement of funds to tourism SME companies to ensure the monies are utilised by SMEs that need the liquidity to stay afloat.
  b. To further allocate additional RM100 million to SME tourism companies, as financial institutions see the industry as “high-risk”.
4.1 PENJANA Tourism Financing (PTF)
  a. Fair and equal distribution of the RM1 billion to finance
transformation initiatives by SMEs in the tourism sector.
  b. Corporate sector too needs the support of financial
institutions in granting automatic moratorium on loans during these extraordinary times.
  c. An immediate cash flow solution needs to be introduced as many travel agencies are going bankrupt, which would cause massive job reductions, ultimately creating a domino effect into other industries.
5. Taxation
   a. To allow the tour and travel industry players to carry
backward current year tax losses to offset against the immediate past year’s taxable profits; and prior year’s taxable profits until such tax losses are fully utilised.
   b. To encourage domestic travel.
   c. To grant a double deduction to businesses and companies that provide leave passage to their employees for a local company trip.
   d. To expand the deduction on the on passage to more than just one yearly event.
   e. To grant a double deduction on staff remuneration for the tour and travel industry for Year Assessment 2020, 2021 and 2022 to encourage them to retain their employees during this difficult period.
6. E-Commerce
   a. To provide funding for digital transformation for travel
agencies and tour operators. (According to Tourism Malaysia survey on domestic travel in Malaysia, 98.8pc respondents prefer to book via online booking sites).
   b. To provide a special new allocation or matching grant for travel agencies to engage in doing online promotions.
7. Rental Discounts to SME Tenants
   a. Government to closely monitor the issue of rental discounts to SMEs because many landlords refused to give the 30pc rental deduction to the SME tenants.
