FIN657_The issues and ethics in finance : The impact of COVID-19 towards the tourism in MALAYSIA PDF

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FACULTY OF BUSINESS MANAGEMENTBACHELOR IN BUSINESS ADMINISTRATION (HONS) FINANCEISSUES AND ETHICS IN FINANCEFIN 657INDIVIDUAL ASSIGNMENTPOSITION PAPER OF AN ARTICLEPREPARED BY:FARAH SYAHIERA BINTI ROSDI2018263302BA242 5APREPARED FOR:PROFESOR MADYA DR NORLIDA BINTI JAAFARSubmitted on 16th November 20...

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FACULTY OF BUSINESS MANAGEMENT BACHELOR IN BUSINESS ADMINISTRATION (HONS) FINANCE

ISSUES AND ETHICS IN FINANCE FIN 657 INDIVIDUAL ASSIGNMENT POSITION PAPER OF AN ARTICLE

PREPARED BY: FARAH SYAHIERA BINTI ROSDI 2018263302 BA242 5A PREPARED FOR: PROFESOR MADYA DR NORLIDA BINTI JAAFAR Submitted on 16th November 2020

FACULTY OF BUSINESSANDMANAGEMENT ASSIGNMENT/ PROJECT DECLARATIONFORM

Student’s Name

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FARAH SYAHIERA BINTI ROSDI

Student’s ID

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2018263302

Program Code

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BA242

Course Name

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Student’s I/C No. Part

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5

Course Code

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980701-10-6016

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FIN 657

ISSUES AND ETHICS IN FINANCE

Assignment/ Project No.

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Assignment/ Project Title

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Lecturer’s Name

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1

Due Date

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16TH NOV 2020

Submission Date

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16 NOV 2020

POSITION PAPER OF ARTICLE PROFESOR MADYA DR NORLIDA BINTI JAAFAR

I hereby declare that the work in this assignment/ project was carried out in accordance with the regulations of Universiti Teknologi MARA. It is original and is the results of my own work, unless otherwise indicated or acknowledged as referenced work. This assignment/ project has not been submitted to any other academic institution or non-academic institution for any degree or qualification. I acknowledge that I have been supplied with the Academic Rules and Regulations for Universiti Teknologi MARA’s Diploma/ Bachelor Degree/ Master’s Degree students, regulating the conduct of my study and exams. I hereby declare that this assignment/ project is written by me and: i. is a result of my own work; ii. has not been used for another assessment at another department/ university/ university college in Malaysia or another country; iii. does not refer to/quote works of others or own previous writings without stating it both in the text and in the reference list; iv. mentions explicitly all sources of information in the reference list; and v. will go through similarity check (Turnitin). I am aware that disciplinary action (which may include the deduction of marks in the assignment/ project) will be taken against me if I am found to be an offender .

F AR AH S Y AH I E R A R OS D I

16TH NOVEMBER 2020 Date

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Student’s Signature

TABLE OF CONTENTS NO 1.0 2.0 3.0 4.0

CONTENTS INTRODUCTION ISSUES OF THE ARTICLE OBJECTION OF THE ARTICLE IMPLICATION OF CONTROL MOVEMENT ORDER I. TOWARD HOTEL BUSINESSES II. TOWARD AIRLINES INDUTRY 5.0 CLOSURE 6.0 REFERENCE

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1.0 Introduction The new Corona Virus or COVID-19 virus is a very infectious disease that caused over 3 million cases and 207,973 death worldwide. This virus first hit the world from Wuhan, China on December 2019 and spreading all over the world since then. Disease Control and Prevention (CDC) from United States identified that COV ID-19 was suspected seafood market in Wuhan is the hub of the outbreak. World Health Organization (WHO) confirmed the outbreak had become a public health emergency and it has also affected the whole global economy. Significant economic impact has already occurred across the globe due to reduced productivity, loss of life, business closures, trade disruption, and decimation of the tourism industry. We can see a huge economy impact happened around the world due to loss of life and business closure caused by this pandemic. In order to flatten the curve of this outbreak, our Prime Minister and the government has decided to implement Movement Control Order (MCO) across the country. This pandemic outbreak hugely impacting the tourism industry in our country. Especially hotel businesses and airline suffering during this COVID-19 outbreak. Tourism is one of the major contributors to Malaysia’s gross domestic product (GBP) after manufacturing and commodities. Campaign such as “Visit Truly Asia” was launched in the hopes of reaching more visitors from around the world in order to increase our balance of payment (BOP). However, due to the the outbreak of COVID-19, the campaign had to be cancelled because a lot of the countries have introduced travel restriction in an attempt prevent its spread. Thus, it caused a greater loss to many people especially to the owner of businesses hotel or tourist attractions around the world.

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2.0 Issues and financial issues of the article (Financial risk management) Based on the article that author found, Malaysia’s tourism industry hit with RM 45 billion in losses. The issue has been risen is tourism industry in Malaysia are able to sustain during the COVID-19 pandemic? My position for this issue is yes, I believe the tourism industry able to survive during this outbreak as long as the government must endorse the people to visit domestic tourism places. Other than that, the ministry has also introduced a Special Fund for Tourism or SFT that supports the development of small and medium tourism entrepreneurs by offering soft loans with a minimum of RM50,000 and a maximum of RM10 million. Therefore, small and medium tourism entrepreneurs able to continue their battle against this pandemic. Locals can show their support for domestic tourism especially during this pandemic because we are not allowed to go out to other country for vacation in order to avoid excessive cash outflow from the country. The financial issue of the article is financial risk management. This is because, the tourism industry in Malaysia has been hit greatly with RM 45 billion losses. Tourism is one of the main contributors to the gross domestic products (GDP) in the country hence it would be huge losses to Malaysia since travel restriction has been implemented in order to stop the chain of this infectious corona virus. Local businesses are having the financial risk due to the control movement order that forces people to stay at home and caused thousands of drastic cancelations of flights and hotel bookings.

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3.0 Possible Objection of the articles Tourism industry such as airlines, hotel business and small medium entrepreneur still able to survive during this COVID-19 outbreak. Airlines industry can sustain during pandemic according to the article from The Star written on November 3, 2020. The airline has implemented on cost-cutting initiatives and cash conservation, which included extensive salary cuts for the entire management team and pilots, said by Malaysian Aviation Group (MAG) since March this year. They are still operating as usual but needed to cut a lot of costings since the demand of the flights overseas is decreasing and the plane must not surpass the 75% of the capacity in airplane. Besides, hotel businesses in Malaysia still able to sustain during this pandemic as the government of Malaysia still allowed the local to travel across the country and that result in demand of hotel business is still there although the road to recovery can be long but the bulk of the tourists’ receipts will be from domestic travelers as Malaysians will likely be travelling locally for the time being. Moreover, the job portal found that the industry is slowly recovering as job advertisements had increased by 22.8 per cent from May till June 2020, despite the challenges posed by the pandemic. Gan Bock Herm, the Job Street’s country manager said that they are confident with the government’s initiatives by aggressively encourage domestic tourism in order to boost job opportunities through this sector through PENJANA cooperate with Tourism Malaysia. On the contrary, another way for the Government’s initiatives to the hospitality sector such as the way subsidy program and the special relief fund although the special relief fund is limited to RM 1,000,000 it still may to relieve the distressed.

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4.0 Implication of Movement Control Order (MCO) I.

Towards Hotel Businesses Many industries, especially hotels are dealing with major challenges and crisis caused by COVID-19 outbreak. Due to COVID-19 pandemic, most hotels had to reduce staff, reduce operation and the worst case scenario that is happening is that many hotels had to declare bankruptcy and close their premises because most of the people are not allowed to travel. ASEAN countries were expecting 30 million tourists this year and also aimed to generate more than $21.5 billion by end of 2020.However, the COVID-19 outbreak made all of these impossible to achieve. This is because our government led by Tan Sri Muhyiddin Yassin had to restrict the entry of foreign tourism in Malaysia and implement the Movement Control Order (MCO) to control the epidemic from spreading widely. Most hotels are struggling to survive let alone to thrive since the restriction order. "It can be said that Malaysia will lose at least 60% of its tourism business by 2020," says Yap Lip Seng, CEO of the Malaysian Hotel Association.

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Implication of CMCO towards Airline Businesses In March this year, our government led by Tan Sri Muhyiddin Yassin announced a total lock down Movement Control Order that resulted in total restriction of visitors and tourists into Malaysia. Most of the countries in the world have responded to this pandemic by implementing full lockdown, sealing their borders and shutting down most of their international flights in order hoping to stop the outbreak from spreading even worse. As a result, our country’s tourism industry is facing major losses from the action taken by the government by locking down the country because 50% of Malaysia’s tourists are from China and Singapore. The increasing COVID-19 cases in these three countries has led to cancellation of most of the

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tours if not all of them resulting in plunging of tourists to Malaysia. Due to this pandemic, our government suggested merging two of the largest airlines in our country Malaysia Airline with Air Asia Airline in order to make sure both of the airlines could survive the crisis. Both of the airlines had stated that the international travel restriction made a huge impact resulting in low demand and making both of the airlines at risk of bankruptcy. This issue was acknowledged by our government and actions are taken in place in order to support these major airlines in Malaysia.

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5.0 Closure In conclusion, with all the challenges that these industries are facing, I’m sure that most of them can survive and thrive. To recover the confidence of domestic and foreign tourists will be the huge challenge for Malaysia tourism need to be accomplished. One of the ways in which is to be achieved is the "Clean and Safe Malaysia" campaign. It takes a lot of courage, work and good management to excel during this worst time. Besides, proper procedures and actions from government, locals and the company itself should play their important roles to make it happen. We still can see some companies in this industry are thriving just because they have good strategy and good financial management. I hope this pandemic will end as soon as possible and I keen to see how tourism industry evolve to adapt and thrive after the pandemic. Nevertheless, by June 2021 Malaysia is expected to slowly recover starting from at the end of the year and stabilize the tourism sector in the country.

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REFERENCES Bernama (2020, June 27). Covid-19: Malaysia's tourism industry hit with RM45 billion in losses. New Straits Times. Retrieved October, 2020, from https://www.nst.com.my/news/nation/2020/06/604012/covid-19-malaysias-tourismindustry-hit-rm45-billion-losses Haroon, R. (2020, May 31). Tourism industry needs all the help it can get from us. New Straits Times. Retrieved October, 2020, from https://www.nst.com.my/opinion/columnists/2020/05/596589/tourism-industry-needs-allhelp-it-can-get-us Tourism industry needs all the help it can get from us. (2020, October 3). The Star. Retrieved November, 2020, from https://www.thestar.com.my/business/businessnews/2020/10/03/malaysia-airlines-shake-up-to-handle-turbulence BusinessToday. (2020, April 15). The brunt on the hospitality industry during this pandemic. Retrieved November 15, 2020, from https://www.businesstoday.com.my/2020/04/15/thebrunt-on-the-hospitality-industry-during-this-pandemic/ Chong, S. (2020, May 13). Staying Aflight In The Time Of COVID-19 - Transport - Malaysia. Retrieved November 10, 2020, from https://www.mondaq.com/aviation/933768/stayingaflight-in-the-time-of-covid-19 New Straits Times (2020, July 24). Tourism and hospitality industry slowly recovering postCovid-19. New Straits Times. Retrieved 10 November, 2020, from https://www.nst.com.my/news/nation/2020/07/611243/tourism-and-hospitality-industryslowly-recovering-post-covid-19 Dewan, M. (April, 2020). Surviving COVID-19: A Malaysian Hotel and Tourism Industry Perspective. Surviving COVID-19: A Malaysian Hotel and Tourism Industry Perspective. Bethke, L. (2020, May 11). The coronavirus crisis has hit tourism in Malaysia hard [Web log post]. Retrieved November 13, 2020, from https://www.dw.com/en/the-coronavirus-crisishas-hit-tourism-in-malaysia-hard/a-53392776 Thornton, G. (2020). Hotel Industry: Navigating the Impact of COVID-19, 3-3. Retrieved November 14, 2020, from https://www.grantthornton.com.my/globalassets/1.-memberfirms/malaysia/publications/hotel-industry.pdf Foo, L., Chin, M., Tan, K., & Phuah, K. (2020, June 12). The impact of COVID-19 on tourism industry in Malaysia. Retrieved November 14, 2020, from https://www.tandfonline.com/doi/full/10.1080/13683500.2020.1777951?scroll=top

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