LETTER | End of the road for many tour bus operators?

LETTER | Bernama recently reported that the Covid-19 pandemic has affected operators of more than 10,000 tour buses in the country, and they are also facing pressure from creditors for repayment of their vehicle loans.

While those buying private vehicles could obtain hire-purchase loans from banks governed by Bank Negara Malaysia (BNM), tour bus (bas persiaran) operators must turn elsewhere for financing as tour buses are deemed higher risks.

This demand is met by leasing companies that have been operating in Malaysia since 1973, and their business model resembles that of taxi companies that charged cabbies interest rates commensurate with higher risks plus the rental of taxi permit at around RM20 daily.

However, tour bus permits are granted only to companies licensed by the Ministry of Tourism, Arts and Culture (MoTAC). In turn, a number of these permits are rented out to individual drivers investing in tour buses and working as owner-operators.

As the number of foreign tourists to Malaysia has surpassed 20 million for the past 13 years, enterprising drivers have raked in good money from charters by tour companies, corporations and others. These drivers also enjoy side incomes from tipping by passengers and shops.

But this year, the number of foreign tourists and local demand will drop to a level so low that it is no longer viable...