Implications and Strategies to Overcome the Crisis Among Accommodation Provider in Kundasang, Sabah During
Post- Covid19: Conceptual Paper
Sylvester Mantihal1*, Ahmad Riduan Bahauddin1, Adilah Md Ramli1
1 Faculty of Food Science and Nutrition, Universiti Malaysia Sabah, Kota Kinabalu Sabah, Malaysia
*Corresponding Author: [email protected]
Accepted: 15 December 2020 | Published: 28 December 2020
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Abstract: The pandemic Covid-19 is currently affecting local business, due to the restriction movement order imposed by the Malaysian government to curb the spreading of the virus.
Many local accommodation providers remained closed while others are slowly recovering their business. However, a new norm must be implied with a mandatory standard operating procedure (SOP) to ensure the contagion is under control. This situation will hinder those businesses from doing a robust promotion to recover their losses during the post COVID 19 situations, predominantly the accommodation providers. Hence, this project will be conducted to assess implications of the pandemic toward local accommodation provider in Kundasang, Sabah. Also, the study will come out with some applicable measures as their plan to recover during post-Covid 19 by the local accommodation provider. The output of this research should be beneficial to the state government of Sabah by either improving the existing policies or provide new frameworks or guidelines to the affected sector (local accommodation provider) to survive post covid-19 in the near future.
Keywords: COVID 19, small businesses, accommodation provider
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1. Introduction
Currently, the world is impacted by the novel coronavirus disease (COVID-19). Hence, the World Health Organisation (WHO) has organized the global efforts to cope with the impacts and proclaimed COVID-19 as a global pandemic on March 11, 2020 (World Health Organization, 2020). According to the United Nations in their article dated March 25th, 2020, the scale of the impacts is unparalleled, and some reports have recommended that it possibly will take more than a decade for the world to recuperate, societally and economically and might substantially compromise the progress of proposed Sustainable Development Agenda (SDGs) 2030. The pandemic was started in the city of Wuhan, Hubei province, China and has brought many new challenges to public health in various countries worldwide (WHO, 2020).
Previously, the world has experienced a similar global public health predicament in the last 20 years that caused by novel virus infections, such as, Influenza A virus subtype H1N1, HIV, Influenza A virus subtype H5N1, SARS-CoV1, MERS-CoV, and also Ebola. However, due the epidemiological novelty of COVID-19 and its rapid mutation, revealed our lack of readiness given its unexpected and rapid spread that apprehended numerous governments around the world unprepared.
Governments in most affected countries imposed significant action including closing international and national borders, lock-down and movement control order (MCO) and a strict
hygiene procedure to minimize and curb the spread of the COVID-19 (WHO, 2020;
Kementerian Kesihatan Malaysia, 2020). As the pandemic devastated economy globally, and the assessment of economy were vital, it remains important due to the pillage it is causing through direct and indirect economic impacts in various countries. The economic repercussions of the outbreak are currently termed as ‘Coronanomics’ (Eichengreen, 2020, 12 March), while some call it as the ‘Black Swan’ (Petro, 2020). The outbreak has generated a ‘de-globalization’
process by forcing countries to lockdown their borders, preventing normal flows of goods, capital, and humans, and business and production closures at least provisionally.
This concept paper will offer two contributions to the literature. First, identification of the implication encountered by the local accommodation service provider in Kundasang, Sabah.
Second, to come out with strategies that can be taken by the local accommodation business in post-COVID 19. The output of this research would be beneficial to the state government of Sabah by providing new frameworks or guidelines improving the existing policies to survive post covid-19 in the affected sector (local accommodation provider) in future.
2. Literature Review
In the current situation as the virus gradually spreading, hotel and lodging industry (accommodation provider) severely affected by the temporary closure of their business. Since the number of positive cases (daily) is reducing, the government slowly lifted the restriction order allowing some business such as restaurant and other essentials to operate. To curb spreading of the virus, strict standard operation procedure (SOP) must be complied by business owners. For instance, restaurant must follow the one-meter social distancing approach in handling their customers. Which, restricting the amount of customer dine in their premises at a time. However, accommodation services like hotel, motel, Airbnb and resorts have to remain out of service temporarily.
Most countries around the world hit by the pandemic have already started to experience the macroeconomic downturn due to the outbreak. In addition, Baldwin and di Munro (2020) suggested that the outcome of COVID-19 outbreak produced a vast and far-reaching economic cost burdens. However, since the first COVID-19 case was reported in December 2019, merely few scholarly research can be found on the economics of the outbreak as the thought of this outbreak were anticipated only in short-term, while analytical briefs are increasingly being covered by news media outlets, research and policy. The limited number of available organized research efforts portray an early indication and estimates of the likely impacts of this pandemic, mostly addressing isolated economic dimensions (Baldwin & di Munro, 2020). The ambiguity of the situation also makes it challenging to produce any useful quantitative estimations of the outbreak’s regarding the future impacts (Barua, 2020).
As physical distancing measures comprise the essential efforts to contain COVID-19, governments in most countries have imposed the constraints on which businesses can still open, segregation between “essential” and “nonessential” businesses (Jiang, 2020). For instance, , the Australian Government has announced an unparalleled “hibernation” policy that small businesses straining with the economic fallout of the COVID-19 pandemic should hibernate (Dervin, 2020; Elmas, 2020). Furthermore, The Australian government has appealed for the global economy to be set into “controlled hibernation” during the pandemic (Macmillan, 2020).
The Australian government has imposed a strategy that involves $130 Bil worth of wage subsidies to attempt to keep as many Australian people to stay in jobs as possible, even if businesses closed for up to six months in 2020 (Worthington, 2020). So far, most of the
businesses and and citizen have accepted the hibernation proposal as it gives the perception that the pandemic predicament is short-term (Kehoe, 2020).
The Malaysian government procured a strict action by imposing MCO from 18th March to 28th April 2020 to restrict the spreading of the virus (Kementerian Kesihatan Malaysia, 2020). That is to say, most operations including accommodation (hotel, motel resort and Airbnb) and restaurants have to remain closed during the MCO period. In 2002, the SARS (Severe Accute Respiratory Syndrome) outbreak has severely affected the hospitality and tourism industry in East Asia, affecting most hotel business and businesses have to be closed to prevent the outbreak (Kim, Chun & Lee, 2005). Due to this outbreak, the World Health Organization (WHO) announced an alert against all non-essential travel to SARS-affected destinations, average hotel occupancy rates across the industry fell by almost 30% between May and June (Kim et al., 2005). Lo and Law (2006) reported that the SARS outbreak were classified as a disaster for Hong Kong’s tourism industry in 2002, as the industry had less control over the effects affected by the outbreak which started from one of its hotels. The unprecedented event leads to major losses and some could not sustain in business. Therefore, this research aims to unravel the implications of the current pandemic outbreak to accommodation providers in Kundasang and provides measures to overcome the crisis.
The Malaysian government enforced a movement control order (MCO) to hinder the mass spreading of the COVID-19 virus. In-line with this, closure of most business and operation (excluding essentials) was reinforced. This affecting the accommodation provider in Sabah, as their business has to be remained closed during the current situation. That being said, this business has not gained any profit and also have to deal with refund to guess that already pre- booked their accommodation. The loss in profit is the major concern for the accommodation provider to sustain their business. In fact, although accommodation is allowed to be operated to date, however the spreading of the pandemic situation is still concerning. This problem could intensify if no pre-emptive attempt to resolve this issue. Figure 1 the conceptual framework portraying the current issue faced by the accommodation provider. Hence, this study will look in-depth into the implication of the current pandemic towards the local accommodation provider. This is vital to identify the major implications to propose some strategies that can be applied by these businesses in post-COVID in the future.
Figure 1: The conceptual framework
A survey will be carried out to accommodation providers/ owners to obtain their response towards the implication of the current COVID-19 to their business. The survey will be conducted in accordance with the current standard operating procedure (SOP) from the Malaysian National security council (Majlis Keselamatan Negara – MKN) and SOP for conducting fieldwork developed by Universiti Malaysia Sabah.
Kundasang were selected because it is a well-known place to visit in Sabah and one of the famous tourist attractions due to its location (near Mount Kinabalu). Therefore, there are many accommodations was established in Kundasang to accommodate the local and international tourists. Table 1.1 summarize the information of informants (the accommodation provider) in Kundasang. Prior to the interview, an appointment will be made along with a consent letter to conduct the interview. In-depth interviews will be fitting for this study since more detailed information could be obtained by having the interviewer ask follow-up questions to seek elaboration on preliminary responses provided by the interviewees (Lo, Cheung & Law, 2006).
To ensure the consistency of approach and coverage, a semi-structured discussion guide will be developed to guide the interviews, covering topics on the impact of Covid-19 on accommodation business. The questions also intended to find out if the accomodation providers have adopted any strategic method for managing the crisis. The open-ended interview questions were designed in consultation with previous studies (Chien & Law, 2003; McKercher & Chon, 2004; Pine & McKercher, 2004; Ritchie, 2004).
Table 1.1: Information of Informants
Establishment Informants
AirBnB Operation-in Charge, Marketing department or Manager Hotel Operation-in Charge, Marketing department or Manager
Resort Manager or Supervisor
Homestay Manager or Supervisor
The interviews were all conducted in Malay to ensure clarity and interview will be audio recorded. The audio will be translated into transcripts and keywords representing strategies which the hotels and restaurant adopted during the current pandemic situation, will be coded and analysed.
3. Discussion and Conclusion
3.1 Impact on the macro-economy
Governments worldwide (including Malaysia) seek to achieve a vital objective as to (1) diminish the contact to COVID-19 in the country and (2) slow down its spread while keeping as much of the economy going as possible (Kirk, 2020). Governments have taken various public health–related and legal measures worldwide including travel bans, lockdowns and constraints on nonessential businesses (limited operating time or temporary closed).Tto achieve the first objective, the economic strategy measures imposed the stimulus packages to achieve the second. While these preventive measures need to be assessed to understand how government policies affect other variable such as employee well-being, the discrepancies in terms of how the pandemic is controlled in various countries also need to be considered.
At the earlier phase, many governments encountered the COVID-19 crisis by issuing travel bans between most of the countries and recommended measures such as work from home (WFH) to ensure physical distancing. However, Barua, (2020) noted that when the virus had spread rapidly, many governments must move to mandatory and strict restrictions such as
lockdowns and travel restriction. A lockdown procedure depends on the government-mandated social (physical) distancing and based on rigorous standard operating procedure (SOP). It seeks to restrict the movement of people, apart from those that require medical care or buying essential needs such as food and medicine. In addition, the lockdowns usually necessitate in shutting nonessential businesses and limiting the operations of essential businesses. However, this strategy, although it is effective, however, closing (temporarily) businesses such as local accommodation provider has affected their business (as illustrated in Figure 1).
Nonessential businesses are including public entertainment venues such as, stadiums, movie theatres, retailers, and small businesses such as local accommodation provider (Kirk, 2020).
The essential businesses such as restaurants, grocery store and pharmacies are obliged to modify the method of serving their customers (Dixon, 2020). Restaurants businesses had to shift their operations from dine in to take-away or delivery to be able to sustain their businesses.
Also, many other businesses considered as “nonessential” by governments (depending on the government SOP), such as, hair salons, retailers, gyms and accommodation provider (in the most affected area), had to closed temporarily, awaiting for government restrictions to be alleviated.
Figure 2: Conceptual framework (adapted from Tuzovic & Kabadayi, 2020)
The conceptual framework Social distancing and employee wellbeing (Figure 2) as proposed by Tuzovic & Kabadayi, (2020) stated that as mostgovernment issuing mandatory lockdowns and travel restriction affecting numerous businesses, ironically, the employee well-being was also affected in many industries and relying on government support in the form of financial aid and economic stimulus packages. As various country experiences economic shocks in a different way, governments have executed an interestingstimulus packages in response to COVID-19’s economic impacts (Cavanough & Tai, 2020), which including, providing loans to small businesses (Sammer, 2020, Malaysian Prime Minister office - PMO, 2020), tax deferment and wage subsidies (Wood, 2020) and allocating cash payments during redundancy.
With this strategy, these financial aid and stimulus packages will support the jobless and financial well-being. Also, it will be beneficial to small businesses to sustain their business in the current situation
3.1.1 The effect of post COVID 19 to accommodation provider
COVID-19 will substantially and constantly affect the hotel industry (accommodation provider). Even before the pandemic, the hotel industry was encountering underlying challenges. The accommodation provider confronted a progressively more pressure to become more sustainable, customer-centric, and adapting digital technology (Valle, 2020). The economic shocks of the pandemic radically shifted the supply and demand balance of the accommodation providers that required this business to re-assess their current business model and developing a new strategy and plan to improve effectiveness as well as safety.
Gallen (2020) stated that the conventional hotel business model concentrating on restaurant and accommodation has been severely affected by the pandemic, which has driven pre-emptive companies to streamline and develop a more expanded business scope. For instance, hotel industry needs to rejuvenate services by analysing and reinventing existing products and considering digitalised marketing strategy. The application of digital technologies can improve the hotel’s operational efficiency and may achieve significant cost reductions in operational cost. For instance, implementing an online booking and check-in can substantially minimize the operation of front desk staff. In the post COVID-19 era, hotels will be more responsive and effective in attracting Generation-Y and Z client and employees when digital and smart solutions were implemented (Valle, 2020) as the current hotels and lodging industry are labour- intensive industry that relying more on standardized manual inputs and operations. Therefore, the implementation of intelligent technologies and digital, specifically in process automation, the process of booking, check-in, and ordering will be automated and considerable reduce the proportion of repetitive administrative work and replace human labour. However, despite the advantages of digital technology implementation, the challenges faced by these businesses (local accommodation provider) probably beyond the anticipation of losing their income in post COVID-19.
Therefore, a necessary study should be performed to assess the implications of the current situation and providing a guideline or framework to the affected business to sustain and revive during the post-COVID 19
3.2 Conclusion
The COVID-19 pandemic has devastated impact and preceded to a major global economic crisis as well as humanitarian, creating a mega-disruption globally. Though physical and social distancing imposed in most country intends to slow down the spreading of the virus and help with public health, it has shocking implications for many businesses and services. This concept paper suggests the importance of accessing the implication faced by local accommodation provider in Kundasang, Sabah. There is a requirement for a holistic assessment of numerous micro-level factors to completely understand the impact of this post pandemic on accommodation providers. This research could be a starting point for future attempts to not only provide support for the accommodation provider in this pandemic but also to ensure that crucial actions that can be undertaken to prevent such a destructive impact on businesses in future pandemics. Moreover, the develop framework and strategy could be implemented in other predicaments created by natural disasters. However, depending on the possibility of such crises, while the individual and other factors included may vary, the necessity to have an ecosystem-based approach to absolutely understand the impact of those crises on businesses would probably persist the same.
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