Several local hotel associations have estimated that hotel prices in Malaysia could increase by 10% to 50%, following the expected increment in sales and services tax (SST) to 8% for selected services come March 2024.

The president of the Malaysian Hotel Association (MAH), Datin Christina Toh noted that the price increase could range between 10% and 30%, but stressed that Malaysia continues to boast some of the lowest hotel room rates in the Southeast Asian region despite this. “In terms of prices within the ASEAN countries, Malaysia is among those with the lowest hotel room rates in the market. For instance, in Laos, we have to pay US$130, equivalent to RM619 for a five-star hotel room, while for a four-star hotel room, it’s US$100, approximately RM476. When compared to our country, it is still more affordable,” she said.

Datin Toh also believes that despite the price increase, Malaysia will not suffer a shortage of hotel bookings, given that the government and the tourism industry are working on numerous initiatives to attract visitors. These include upcoming promotions, as well as the introduction of visa-free entry for tourists from selected countries, including China and India.

Meanwhile, the national president of the Malaysia Budget and Business Hotel Association (MyBHA), Ganesh Michiel said that hotel prices are expected to soar by up to 50%, in contrast to MAH’s more modest estimation. This is due to the trickle-down effect of the new SST rate on the entire supply chain of the industry, he said.

Among other things, Michiel said that the cost of cleaning services, electricity, water, and transportation will all increase due to the new SST rate, and hotels may pass on these expenses to end-users to ensure that their operations remain unaffected. As such, the combined amount may be result in a significant sum.

“The price increase is a result of actions that escalate operational costs, such as tax hikes. For example, suppliers providing products to hotels are also affected by the SST increase. Similarly, laundry services, if they pay SST, are undoubtedly compelled to raise the costs of washing towels, bed sheets, pillow cases, and hotel blankets,” Michiel explained.

Malaysia’s SST is set to increase from the existing 6% to 8% come 1 March 2024, as proposed by Prime Minister Datuk Seri Anwar Ibrahim during the tabling of Budget 2024. During the session, Anwar had said that the increase will be applicable to numerous services, but will exclude F&B and telecommunication services so as to avoid burdening the public. The Royal Malaysian Customs Department also later clarified that parking space operators and logistic service providers will be exempted as well. Additionally, the SST increase will not apply to credit and charge card services.

(Source: Malay Mail)

• TAGS:
• Datin Christina Toh
• Ganesh Michiel
• Hotel Rates
• Hotels
• Malaysian Association of Hotels
• Malaysian Budget and Business Hotel Association
• Sales and Services Tax
• SST