Hotel price hikes push guests to unregulated stays?

Industry fears revenue drop

Roskhoirah Yahya
Roskhoirah Yahya
13 Feb 2024 10:31am
Image for illustrative purposes only. - 123RF (Small picture: Zamari)
Image for illustrative purposes only. - 123RF (Small picture: Zamari)

SHAH ALAM - Malaysian hotels are bracing for increased room rates to offset rising operating costs, even as industry income could drop by 40 per cent.

1108 Hotel & Resort's Chief Executive Officer Zamari Muhyi said the increase would not be drastic but rather in stages.

He said they could no longer accommodate the increasing operating costs.

"The industry can no longer absorb the ever-increasing operational costs

"Although Sales and Service Tax (SST) from March 1 is not imposed on food, beverages, and telecommunications, other services are affected.

"So where can we find room to survive by maintaining the original prices?

"For example, air conditioner maintenance. If currently, the supplier charges RM100, with the imposition of SST, it will likely increase by two per cent, indirectly increasing the costs imposed on us," he said.

Zamari, who is also the MyBHA Perak Chairman, stressed the situation becomes more critical with the increase in electricity and water tariff costs.

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"Hotel operators pay bills at commercial rates compared to Airbnb operators and unlicensed accommodation providers.

"These operators only pay rates based on domestic prices and no taxes are imposed on them," he said.

Zamari said the increase is expected to reduce the hospitality industry's income by 30 to 40 per cent.

"Many visitors may choose to stay in unregistered accommodations that are not monitored for cleanliness and safety because they are cheaper," he added.

Anticipated price increases based on 30 per cent hike:

1-star RM62 -> RM80

2-stars RM80 -> RM104

3-stars RM260 -> RM338

4-stars RM430 -> RM559

5-stars RM520 -> RM676

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