“PIVOT” is a fashionable term in tourism these days. It suggests a need for recalibration as local players scramble to appeal to a different market segment – this time to Malaysia’s domestic visitors.
“Penang was built by merchants and entrepreneurs who’ve always found ways to survive and thrive under challenging circumstances. That creativity and resourcefulness should come in handy during this time,” says Yeoh Siew Hoon, the founder of Web in Travel, Asia’s leading digital travel media and events platform.
Staycations are the current fad, and by the look of things, it might be here to stay, at least until it’s safe to travel abroad once more. But this conjecture remains premature, especially since its viability as a medium-term recovery measure is still a shot in the dark.
“Domestic tourism can’t make up for the loss in inbound, for sure, but at least it can plug a hole for those who are smart and imaginative enough to pivot to the local market. Penang has the entire Malaysian market to tap from, and it is already a desired destination for Malaysians.”
The "Malaysian Residents Package" is by far the Mansion's most popular tour package. Photo: The Cheong Fatt Tze Mansion.
The DNA make-up of Penang’s hospitality industry is diverse, from beachfront resorts that line Batu Feringghi to the heritage hotels and budget accommodations that suffuse George Town with old world charm and modern vigour.
Pre-pandemic, all depended heavily on international demand, but bouncing back has taken on very different meanings for each of these operators.
Shen Yi Loh-Lim of Cheong Fatt Tze Mansion details how the mansion has had to change its entire way of doing business: “We had to quickly find new ways to reach customers, doing things we had never done before like selling room vouchers. Our restaurant Indigo went from dining in only to doing delivery and takeaway; we’ve had some pleasantly surprising success with this, and even as restrictions have eased and dine-ins have started again, we are still receiving takeaway orders.”
Carefully-curated holiday packages were also designed to attract different target markets. “Our most popular by far is the ‘Malaysian Residents Package’ which comes with afternoon tea for two, complementary cocktails and attractive discounts on F&B.” While “Retreat in the Blue Mansion” offers guests the option to truly withdraw from the hustle and bustle of daily life with free room service, entertainment and laundry services, and attractive long stay rates.
Shen Yi Loh-Lim. Photo: The Cheong Fatt Tze Mansion.
Response has been encouraging so far. “We have seen many different types of guests at the Mansion, not just from Penang but from across the country. One of our first few guests when we reopened was a couple of businessmen who, after months of being locked in with their families, decided to escape for a couple of nights and play golf. Probably under the guise of being on a business trip!” chuckles Shen.
“The single most important change we have had to make was to focus on building trust with our guests. Our philosophy is simple: if we can convince the biggest ‘germaphobe’ that we are doing everything in our power to keep them safe, then we are doing something right.
“In some ways, we are lucky that we already have a very unique offering and close to three decades of growing our profile as one of Penang’s most iconic buildings. So today, it’s more about making sure we meet local demand at the right price points, with added benefits.”
Dim Future Ahead
On the other hand, budget accommodations like Ryokan Muntri Boutique Hostel are getting the short end of the stick. Now in its 10th year of operation, owner Francis Lee says revenue dried to a trickle during the MCO period. “We only had one guest, a Hawaiian who stayed with us. But when the Conditional MCO was introduced and after interstate travel resumed did the hostel finally see a few other local visitors coming in for work reasons.”
At full capacity, the backpacker hostel is able to house 45 people based on different room types. But this figure has since been halved following SOP implementations, making it unfeasible for business to be sustained for much longer. “Even during pre-Covid-19 days, to cover costs, our breakeven point was to have at least 50% occupancy,” explains Lee, who charges RM30 per night for dorm rooms and RM100 for private ones. “I honestly can’t tell if Ryokan is able to weather this storm; I suspect our costs will only increase once borders reopen.”
Owner of Ryokan Muntri Boutique Hostel, Francis Lee. Photo: Regina Hoo.
To swerve away from the coronavirus crisis, Lee is looking to promote Ryokan as the ideal lodging for school trips. “We’ve played host to a number of schools before this. They usually come in big groups, and occupy the whole hostel for a few days. It’s definitely an option worth looking into.”
When asked about locals’ reluctance to explore their own backyard, Lee is blunt in his response. “Even with competitive rates, buffet breakfasts and a daily free flow of coffee and tea, these still cannot detract from where many of Penang’s budget accommodations are located – at a criss-cross of poorly-lit, seedy alleyways. Our foreign guests, perhaps already experienced, aren’t fazed by this, although I’ve gotten complaints about snatch thefts. Locals, who of course tend to know better, will want to give these supposed crime hotspots a wide berth, preferring instead to splurge on hotels. This obviously won’t bode well if we’re shifting the tourism focus inwards.”
Echoing Lee’s view, Yeoh shares a final thought, “Rather than fight over a dwindling market, now more than ever, there needs to be unity among local businesses to grow the pie together. There needs to be a willingness to collaborate and work together, and not operate in silos and within factions.”
Regina Hoo is the deputy editor of Penang Monthly.