KUALA LUMPUR, Jan 26 — Former finance minister Lim Guan Eng said the federal government still has not grasped the severity of the problems facing the local hotel and tourism industry that was on the verge of collapse.

Instead, he suggested that the Perikatan Nasional administration under Prime Minister Tan Sri Muhyiddin Yassin appeared to be more focused on pursuits such as an Emergency proclamation and suspending Parliament.

"Instead of facilitating bank loans or an automatic loan moratorium, Tourism, Arts and Culture Minister Datuk Seri Nancy Shukri appears to be trapped in a different reality,” Lim said in a statement.

The Bagan MP cited her statement to the Dewan Rakyat in November last year where Nancy said despite the closure of 109 establishments in the hoteling sector and 95 tourism agencies in 2020, her ministry has since approved new license applications for 135 tourism companies and operators during the same period.

"This is ridiculous. Can Nancy please tell us where are the new tourism agencies in Malaysia? In Budget 2021, the ministry continues to adopt an ‘ostrich in the sand approach’ by predicting the average hotel occupancy for 2020 will be 61.1 per cent, and 58.4 per cent in 2021.

"How can they stick to its initial projection of 61.1 per cent hotel occupancy for 2020 when the tourism industry faces RM100 billion in losses last year?” he said.

Faced with this RM100 billion loss in revenue, Lim added that the federal government has not done enough to aid and save the tourism industry.

"Not just hotels, but many tourist agencies and bus operators have closed shop. If the basic infrastructure of tourism either collapses or closes down, how can Malaysia benefit from any revival of the tourist industry?” he asked.

He lamented the upcoming closure of the Equatorial Hotel Penang due to the adverse economic effects of Covid-19, as it is one of the earliest five-star hotels in the state which was brought in by the late Penang Chief Minister Tun Dr Lim Chong Eu in the 1970s.

"As a Unesco World Heritage site, the twin cities of George Town and Melaka have both lost their earliest five-star hotels. Ramada Plaza Melaka, formerly known as Renaissance Melaka, closed down in May last year.

"This shows how serious the adverse impact of the Covid-19 global pandemic has been on the local tourism industry,” Lim said.

He argued that Hotel Equatorial Penang’s closure has proven the ministry’s projected 58.4 per cent hotel occupancy rate for 2021 to be patently absurd.

"Such false and unrealistic rosy projections will damage public confidence that the government knows how to do its job to save our tourism industry.

"Can the Emergency and suspension of Parliament help to save our hotels and tourism industry?” Lim said.

Yesterday, Hotel Equatorial Penang’s general manager Alan Ong said the hotel’s directors decided the closure will take place some time before March 31.

Hotel Equatorial Penang is set to close down effective March 31 this year. — Picture by Hotel Equatorial Penang