Ramada Plaza Melaka Hotel shutters operations amid Covid-19 crisis

TheEdge Wed, Apr 29, 2020 10:02pm - 11 months ago

KUALA LUMPUR (April 29): The Ramada Plaza Melaka Hotel has joined the list of hotels that have fallen victim to the Covid-19 pandemic.

“As a result of the crisis, the continued operation of the hotel is no longer viable,” said its operator MTB Realty Sdn Bhd.

“It is with sincere regrets that we wish to inform that the owners have now decided to close the business of the hotel indefinitely,” it said in a letter to the National Union of Hotel, Bar and Restaurant Workers sighted by theedgemarkets.com.

MTB Realty said it will be serving two months’ notice to the employees with June 30 as the last working day.

The employees will be receiving termination benefits as per their contracts of employment, it said.

MTB Realty said the outbreak and the resulting imposition of the Movement Control Order (MCO) had severely impacted the hospitality industry. 

Malaysian Association of Hotels (MAH) chief executive officer Yap Lip Seng previously told The Edge Malaysia weekly that hotels are looking at potential losses of RM3.3 billion from room revenue alone if the MCO ended on April 28, and that the losses will be far worse each time the MCO is extended.

He added that the country will see up to 30% of hotels closing down either temporarily or permanently, with many of them to be up for sale.

Earlier today, Kuala Lumpur-based G City Club Hotel Sdn Bhd had also announced it was ceasing operations after a decade of being in the hotel business, due to the sharp decline in tourist arrivals amid the pandemic.

The outbreak exacerbated the situation for G City, as the company was already struggling with losses over the past few years.

“With Covid-19 and forecasts of 18 months before normalisation of the global economy, and low travel confidence, the management reviewed its hotel operations and is making a difficult but needed decision to cease operations,” it said in a statement.

There have been several cases of hotels being downsized and shut down since the MCO commenced, which included Plenitude Bhd’s closure of three of its hotels and the downsizing of other hotels it owns.

The Main Market-listed company cited domestic and worldwide travel restrictions, which resulted in decrease in business.

Earlier this month, it was reported that Tower Regency Hotel in Ipoh would cease operations permanently on April 30 to cut losses. Five other hotels in Melaka were also closing due to the impact of Covid-19 on the industry.

The Malaysia Budget Hotel Association recently urged the government to draft a law to protect hotel owners and operators from the impact of Covid-19, noting that the association’s members had said that the Special Relief Fund announced was not friendly to hoteliers.

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