GEORGE TOWN: The Covid-19 pandemic has claimed its first “economic victim” here when the VHM Hotel Management Group disclosed through a memorandum that it was closing some of its properties in Penang and Ipoh.
VHM owns and manages up to 17 properties in Penang, Ipoh and in the border township of Danok (Thailand).
It is learnt that employees in the Jazz, and Jerejak in Penang as well as its Kinta Riverfront (Ipoh) hotels were issued circulars notifying them of the closure of the properties.
The memorandum on “Closure of Hotel Business” from the hotel’s board of directors and management to its staff dated April 22 revealed that the hotel will be closed and all its staff will be retrenched.
It mentioned that the management has taken cost mitigation measures since the virus began to circulate in China late last year.
It also mentioned that the hotel has been suffering losses for months even before the virus outbreak, but it tried to keep its employees.
The memo also mentioned that the management has no other option but to cease operations and retrench the staff.
Jazz Hotel was officially opened in January last year.
According to the Malaysian Association of Hotels (MAH) chief executive officer Yap Lip Seng, hotels are looking at potential losses of up to RM3.3 billion from room revenue alone for the first six months of this year.
These losses were based on the assumption that the Movement Control Order (MCO) will end on April 28 and it has worsened each time the MCO was extended.
MAH has about 1,000 members, who oversee 160,000 rooms.
Yap disclosed that there is a sign of desperation in the industry, as hoteliers have no choice but to lay off staff, put them on unpaid leave or recommend pay cuts.
Yap said the industry also was bracing for measures such as social distancing and healthcare checks to be part and parcel of tourism for now.
“It also means that we cannot encourage crowds to gather. It is tough as tourism is essentially a people-centric service and touch.”
