Hotel prices in Malaysia are expected to witness a surge ranging from 10 per cent to 30 per cent, following the recent increment in the Sales and Services Tax (SST) to 8 per cent, effective from March. Malaysian Hotel Association (MAH) president Datin Christina Toh revealed this information, emphasising that despite the increase, Malaysia continues to offer some of the most competitive hotel room rates in the Southeast Asian region.
According to a locan news portal, Toh highlighted the comparative affordability of Malaysian hotel rates in contrast to neighboring countries within ASEAN. For instance, she pointed out that in Laos, five-star hotel rooms can cost up to US$130 (approximately RM619), and four-star rooms around US$100 (approximately RM476), whereas Malaysian rates remain relatively lower.
The anticipated price hike is not solely attributed to the SST increment but also factors such as peak seasons like school holidays and festivities, as mentioned by Toh. However, she reassured that promotional efforts aimed at attracting visitors and government initiatives, including visa-free entry for tourists from China, India, and other ASEAN countries, will help mitigate any adverse effects on hotel bookings.
Echoing similar sentiments, Malaysia Budget & Business Hotel Association (MyBHA) national president Ganesh Michiel projected a potential increase of up to 50 per cent in hotel prices due to the cascading effects of the new SST rate on the industry’s entire supply chain. Michiel emphasised that operational costs, including cleaning services, electricity, water, and transportation, are all impacted by the SST hike, prompting hotel operators to adjust prices to sustain their businesses in the long term.
The increase in operational costs, attributed to tax hikes, extends to suppliers providing products to hotels and laundry services, which may consequently raise the costs of essential hotel amenities.
This announcement comes in the wake of Prime Minister Datuk Seri Anwar Ibrahim’s declaration last year to raise the SST rate from 6 per cent to 8 per cent and expand the scope of taxable services to include brokerage, underwriting, and karaoke, as part of Budget 2024.
As the tourism industry braces for these changes, stakeholders remain optimistic about Malaysia’s attractiveness as a travel destination despite the anticipated adjustments in hotel prices.
