PETALING JAYA: With the resumption of interstate travel and business operations, hopes of an economic recovery have risen sharply.

However, an economist has warned that it is too early to expect the economy to turn bullish.

The ban on interstate travel was lifted last week after the country’s vaccination rate against Covid-19 surpassed the 90% mark and as expected, there has been an increase in travel, particularly during the long weekend.

Association of Small and Medium-Sized Enterprises (Samenta) General Secretary Yeoh Seng Hooi said that with most states entering phases three and four of the national stimulus package, consumer confidence is expected to improve. . “This bodes well for small and medium-sized enterprises (SMEs),” he said. the sun.

Yeoh said Samenta expects the sales trajectory to see a gradual increase, although cost inflation remains a concern. “SMEs may have to pass some of these additional costs on to consumers. “

He added that the festive end-of-year and back-to-school sales are only seasonal highs and therefore not a barometer of economic recovery.

He also expressed concern that consumers will be more careful, choosing to avoid malls and other crowded places.

Yeoh said he expects SMEs to continue to plug into omnichannel marketing, through online and offline media.

“Also expect SMEs to launch advertising and marketing campaigns to drive sales through a mix of social media and other media. “

Malaysian Hotel Association general manager Yap Lip Seng said hotels are already well prepared for the expected increase in guest numbers.

“Hoteliers have also demonstrated a high level of compliance with standard operating procedures (SOPs) to minimize risk to employees and guests. “

Yap said hotels already have contingency plans in place in case cases of Covid-19 are detected at their premises.

He gave the assurance that the hotels are safe, not only for stays and meals, but also for business events.

Yap said hotels had seen an increase in inquiries even before the travel restrictions were lifted. “Outside of Langkawi, which has already reopened, there has been an increase in bookings for popular destinations such as Penang, Ipoh, Pangkor, Genting Highlands as well as Legoland in Johor.”

He added that hotel occupancy rates ranged from 20% to 25% before interstate travel was allowed, and based on the trend during the recovery movement control order period the hoteliers expect the occupancy rate to hit around 40% last year.

“Our survey also shows that 55% of travelers are locals, while international visitors represent the remaining 45%.”

Yap said that until international arrivals are allowed, the domestic market will remain dominant for the next 12 months. “A full recovery is not expected until 2023 or 2024.”

University of Malaysia economics professor Datuk Dr Rajah Rasiah said any expectation of a scaled-up recovery planned by the World Bank and the International Monetary Fund would be misplaced.

He said that amid geopolitical developments and the US-China trade feud, Malaysia should stop the slowdown that began in 2017, especially through the 12th Malaysian Plan.

He said the government could help ease the recovery process, especially for the informal sector, by simplifying access to credit for businesses facing severe cash flow problems.

Rajah said the upcoming festive sales could help the recovery process for some industries, such as travel and hotels, but warned of an expected boom.

He added that aside from businesses, the government should also help others crippled by lockdowns, especially farmers.