Hotels reeling from pandemic

Lyna Mohammad

Since the emergence of the coronavirus outbreak, Brunei’s economy has been affected with the local hospitality industry among the hardest hit.

As the effects of the virus spread across the entire world, the hospitality industry in neighbouring countries has been impacted significantly, with some hotels abroad losing income every week, forcing some to close and be sold off.

Here in Brunei, hoteliers and travel agents are struggling to survive, with some hotels having no alternative but to impose forced unpaid leave to its local employees. It is predicted that if the situation prolongs, some might also begin to close doors.

Statistics shared by the Brunei Association of Hotels (BAH) show that hotel room revenues dropped to -41 per cent from January 2020 to April 2020, while food and beverage revenue dropped to -61 per cent in the same period, with the latter drops being due to no mass events being held.

The Borneo Bulletin spoke to senior management officials from several local hotels who are members of BAH to get their insights on the current impact of COVID-19 and what they see could help the businesses recover soon or at least stay afloat.

Senior management officials from several local hotels who are members of BAH. PHOTO: RAHWANI ZAHARI

Director of Operations at Mulia Hotel Mohd Iswandi bin Maaruf in his capacity as BAH President shared that local hoteliers, particularly in the Brunei-Muara District, are feeling the pinch as on top of the huge drop in accommodation revenues, the food and beverage revenues are also hit hard from the impact.

Brunei Tourism suggested that local hoteliers concentrate on the domestic market. However, being a small country, Iswandi noted that the domestic market doesn’t help much.

“When you talk about the domestic market, you are talking about locals taking their family for a night or two retreat at hotel. On normal days, you would only see locals checking in at hotels such as The Empire Brunei or The Rizqun International Hotel. More so with the outbreak, hotel swimming pools are not allowed to open and restaurants have limited capacity with no buffet allowed.”

International travellers are required to stay in quarantine while also paying for the BND1,000 fee per person for swabbing. They would need to spend at least BND1,750 and would think twice to travel, said Mohd Iswandi.

“During this impact of COVID-19, we have been discussing among our ASEAN Hotel and Restaurant Association and they are the ones who are assisting us with all the guidelines, preparing all the informative things, stimulus package, recovery and so forth. They are the ones who are assisting BAH.”

He highlighted that the hotel and travel industry may not be able to survive for a year. “I think that the hospitality industry, including hotels and travel agents, is badly affected. This is the group that needs assistance, especially since most hotels are keeping up with the call to keep their local employees. Most hotels have between 60 to 80 per cent local staff. Where can they go if they are let go?”

Hoteliers are trying every effort to keep the local staff and some have no options but to go for 35 per cent pay cuts and forced unpaid leave, while some are also in the midst of a 50 per cent pay cut. “We have never seen anything quite like this and the impact is devastating on industries that support tourism, hotels and the small and medium-sized businesses.”

On another note, BAH extended appreciation to the Government of His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam, in assisting affected businesses by introducing several stimulus packages such as fiscal stimulus on 25 per cent subsidy for salary payment, Employment Trust Fund (TAP) deferred payment and 15 per cent discount on electric bills and water bills.

Apart from this, national carrier Royal Brunei Airlines (RB) has also been working hard to assist hoteliers and did their part in making efforts to promote Brunei as a destination and it may take at least a year for the industry to recover.

Mohd Iswandi expressed hope for restrictions to host weddings at a minimal number, “to not only help food and beverages revenue. Government halls can also be utilised, as there are no cases in Brunei.”

He said once a vaccine is available, then the future will be clear, but at the moment what they can do is request for the lifting of some restrictions to help out the industry, even without having tourists coming in.

The hospitality industry appreciates government initiatives, such as the 25 per cent subsidy for local employees and 15 per cent on rebate on utilities expenses over the period of three months, said The Brunei Hotel General Manager Andy Goh.

Brunei hotel businesses are largely dependent on inbound travellers, be it independent business travellers or tour groups with guided tours.

“We understand the initiatives and efforts taken by the Ministry of Health (MoH) to help curb and flatten the curve of COVID-19, through prompt action such as border closure, self-isolation for residents returning from overseas, social distancing practices, school closure and other hygiene exercises.”

He added that these efforts have paid off in flattening the curve and the country has so far reported no new cases for over 30 days.

Goh highlighted that it is the hoteliers’ hope and belief that the self-isolation and compulsory swab test of BND1,000 per person are temporary measures until such time that a vaccine is discovered and worldwide COVID-19 cases are controlled.

Most hotels have looked into their financing situations and offers provided by the local banks and, on top of that, stringent cost control exercises such as unpaid leave and salary cuts.

“In line with these measures, we hope the government will consider and continue to provide financial relief to the affected businesses during the travel restrictions and border closures. It is vital for hotels to survive through this difficult period until the end of year 2020, taking into consideration that Brunei Darussalam will host the 2021 ASEAN Summit.”

Operations Manager at Parkview Hotel Safa Salim hopes restrictions on events such as weddings and birthday parties will relaxed from the current 20 to 100 closest family and friends.

Ever since the country recorded over 30 days with no new cases of COVID-19, the hotel has received customer requests to hold small events at the hotel’s venues, with invites from 20 – 50 pax made up of their closest family and friends, but they have had to turn them down if there are more than 30.

For the safety of the community and their employees, they are strictly following the safety guideline set-up by the MoH and they are not expecting any major event to happen soon in Brunei, as they are fully aware of the situation.

Since hotels have become self-isolation centres for travellers coming back to Brunei, it has not been easy to execute the salary cuts (unpaid leave) due to the hotel still needing the employees’ services for the isolation guests, she said.

“I can only imagine the struggle of the smaller hotels in Brunei as they only depend on business travellers and tour groups from their room sales. However, since some have restaurants, the government can help by lifting restrictions on the food and beverages (for buffet and small events in the restaurant).”

The BAH is aware that with borders closed, the only market is domestic. Locals are keen to bring their families out on the weekend for quality time especially to a hotel that has swimming pools facilities.

However, it is not currently possible as there are no activities to enjoy while they are staying in. Being able to provide activities again can help the hotel industry in Brunei to survive and keep the business running.

“If the situation prolongs, I don’t think the hotel industry can survive for the next two to five months, therefore, we will still need government support. About 80 per cent of our employees are locals and it will be devastating if we can’t provide them the job security as they have their own commitment like families to support and loans to pay.”

Meanwhile, General Manager of Wafa Apartment Hotel Kamil Kassem said the hotel industry is experiencing a major drop in revenue due to the pandemic. He added that the domestic market volume in Brunei is very small, and thus, most of the hotels do not depend solely on the local market.

“Although this is the current situation, we are grateful to the government for assigning our hotel to be part of the ‘Isolation and Monitoring Area Project’ for incoming isolated guests. Our hotel supported the government in accommodating guests as our hotel’s community service,” he added.

He shared that the room occupancy of all hotels is currently very low and there have been a lot of booking cancellations for functions, events and weddings.

This, he added, greatly affects hotels’ operations and bringing in losses resulting in some staff forced to take unpaid leave and some salaries being reduced, something they do not want to happen.

To move forward with the business, they opted to follow the MoH guidelines for functions, events, weddings and even the food and beverage and services.

“The hotel industry has no problem with compliance of the health guidelines but we are asking for more support from the government, now more than ever. We are asking to reassess the current situation and to be more permissive on the regulations and restrictions of the guidelines. We are hoping for more consideration as companies in the industry aim to sustain the business and support the workforce here in Brunei.”