Entertainment tax – the biggest obstacle facing the industry | Market News


Sunway Malls and Theme Parks CEO HC Chan has described the 25% entertainment tax as the biggest obstacle that besets the industry.

He noted that this is counter-progressive and should be urgently addressed considering that the Covid-19 pandemic had substantially shrunk the revenues of entertainment operators.

“We fear that if meaningful progress is not made, there will be more substantial industry casualties which will affect the tourism revenue,” said Chan as quoted by the New Straits Times (NST).

To combat Covid-19, he revealed that they had ramped up precautionary measures at Sunway Theme Parks since January this year.

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“We have enjoyed an average of 10% growth in recent years for both Sunway Lagoon and Sunway Lost World Of Tambun,” he said.

“As theme parks were the very last sector to reopen, we have been diversifying our products and packages since then and it’ll be a while till our visitorship to return to normal.”

Sunway malls and theme parks had shown signs of recovery, with footfall at Sunway Pyramid Mall, Sunway Velocity Mall, Sunway Putra Mall, Sunway Citrine Hub, Sunway Giza Mall, Sunway Carnival Mall and Sunway Big Box Retail Park hovering at between 60% and 70%.

Tenant sales had also recovered by 30% to 40%.

“The return of footfall underscores the fact that malls remain important for Malaysians and as the confidence returns, we believe that outlet sales will recover to 50-60% by the end of the year,” he told NST.

Despite the challenging outlook, Chan said that Sunway Malls – which is Sunway Group’s retail and amusement subsidiary – posted range-bound of 5% to 8% growth last year.

“We noticed this similar trend during the fourth quarter of 2019 when the nation’s gross domestic product (GDP) growth slowed to 3.6%, a 10-year-historical low,” he said.

For this year, Chan said an accurate estimation would be untenable at this point given that the situation remains highly fluid.

“We like to think the worse is over since Q2 2020 and we expect second half 2020 to be better than the first half (1H) of the year,” he said.

“Overall, we hope that sales performance for Q4 2020 will achieve 75% to 80% range of normality relative to Q4 2019.”

 

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