The COVID-19 global pandemic has thrown the Malaysian economy into uncharted waters. None have been worse hit than the aviation and tourism sectors as well as small and medium enterprises.
Most companies in these sectors have seen their operations at a standstill for the past few months causing them to continually bleed money or worse, declare bankruptcy. SMEs should be of particular concern as they are the primary backbone of the economy, making up 98.5% of businesses in the country, accounting for 65% of national employment and contributing nearly 40% of Malaysian GDP.
So how can they best move forward during these trying times?
Building business resilience
Although some parts of the world are still reeling from the brunt of the pandemic, here in Malaysia, the situation is relatively better. The government has already announced the reopening of the domestic tourism sector in a bid to accelerate economic recovery.
The resumption of interstate travel as well as planned economic incentives is set to increase consumer demand in the short term. This will have positive knock-on effects on the aviation sector as well as local SMEs’ reliance on tourism income.
Strengthened by domestic demand and the Visit Malaysia 2020 campaign, hopefully, this segment of the economy will recuperate and businesses can improve their cash flow as well as sales and profits. This will build the necessary resilience against short-term shocks and better prepare the sector for similar situations in the future.
Sustainable business practices
How companies respond to the range of sustainability issues during the crisis will have a lasting impression for their balance sheets and productivity during the recovery period. Mitigating negative social and environmental impacts on workers and supply chains will likely help businesses build long-term value and aid their prospects in short to medium term recovery.
Here are some ways to approach this:
- Digitise your business to both reduce costs and carbon footprint. The government has announced nearly RM840 million in loans and grants to help bring offline businesses online.
- Form partnerships with other businesses and develop fresh business models and synergies e.g. collaborate with a company producing facemasks and in return, offer discount travel packages to their staff.
- Develop flexible work and hygiene protocols. As much as possible, try to work from home and when it is not possible, observe adequate hand sanitising and social distancing measures.
The economic bloodbath caused by the pandemic has seen many companies within the tourism and aviation sector to go under. SMEs that couldn’t keep up suffered similar fates.
Hence, the systematic reopening of the economy will see lesser players in the field. While that may mean a larger market share for businesses, that share must be won in a “battle.” It is also likely that those with an entrepreneurial edge would introduce innovative solutions that could displace their company if it fails to adapt to the new realities of the sector.
For example, several hygiene-friendly doors have been introduced to the market, virtual tours are all the craze on online platforms, and digital mom and pop stores servicing local communities could be the norm of the future. If businesses are not actively assessing competition and evolving with the times, they risk being displaced.
Embracing a new normal
The future of aviation, tourism, and the reality for most SMEs will see significant changes as we move towards the post-COVID-19 new normal.
Newly introduced measures by the government are expected to aid in recovery and stabilise the sectors by June 2021. In the meantime, the challenge of jumpstarting businesses and inspiring confidence in consumers looms ahead.
As international borders are expected to gradually reopen, the most adept will thrive.