SINGAPORE: Hotel Equatorial Penang will shut down operations by the end of March because of “adverse business conditions caused by COVID-19”, the hotel’s management announced on Tuesday (Jan 26).
“This is a very sad and difficult decision,” the hotel’s management said in a memo to employees seen by CNA.
The last day the hotel will be open for business to the public has yet to be decided, but will be before Mar 31, it added.
“Until we officially cease operations, all of you shall remain as employees of the hotel and we remain committed to upkeep the strong heritage and name of Hotel Equatorial Penang,” said the management.
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The hotel has suffered “huge losses” but will pay severance benefits, details of which will be announced later, the management added.
According to the Star, Hotel Equatorial Penang was the first five-star hotel in the south of Penang island when it opened more than three decades ago. The hotel houses 413 guestrooms and suites, and is able to accommodate up to 2,600 people for meetings and events.
George Town, listed as a UNESCO Heritage Site, is 20 minutes from the hotel.
The hotel is owned by Malaysian hospitality chain Hotel Equatorial, which was established in 1971. Its other properties are located in Kuala Lumpur and Ho Chi Minh City, according to the company’s website.
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Hotel Equatorial Penang is the latest to be affected by the COVID-19 pandemic and border restrictions.
Malaysia’s Tourism, Youth and Sports Committee chairman said in December that 13 hotels alone in Johor ceased operations last year.
Malaysia’s hospitality industry has been battered by the Movement Control Order (MCO), which was first imposed in March last year to curb the spread of the coronavirus.
MCO restrictions resumed in January amid an sharp rise in COVID-19 cases, and are currently in place for all Malaysian states except Sarawak.
Hotel occupancy in January dropped to “low 20 per cent” after the announcement of the MCO, said President of the Malaysian Association of Hotels N Subramaniam last week.
“Cancellation of bookings were recorded across the country, including for the coming Chinese New Year period. For every two weeks of MCO, the hotel industry is expected to lose over RM300 million in revenues,” he added.
The COVID-19 situation also resulted in local tourist guides losing their source of income, while the number of visitors in theme parks and shopping malls has dwindled.