BUDGET hotel owners are likely to hike up their rates in the months to come as operational costs rise.
The hoteliers said rates could go up 30-40% over the next three months.
They said it was too early to tell how the hike in the sales and services tax (SST) from 6% to 8% will affect business.
Malaysian Budget and Business Hotel Association (MyBHA) president Sri Ganesh Michiel said business has not declined because of the higher tax.
"There has been no decrease in business since the implementation of the SST. We are currently studying the increase in operational costs and decrease in profits.
"We cannot simply increase room rates. We need to look into the situation (hotel operations) first," he told The Vibes.
In the tabling of Budget 2024, Prime Minister Datuk Seri Anwar Ibrahim announced the proposal to raise the SST rate to 8% from 6%. The SST increase was implemented on March 1.
Anwar said the raise would not apply to food, drinks and telecommunication services.
According to the 2024 Federal Government Fiscal Review and Revenue Estimate Report released by the ministry, the government is expected to collect RM35.8 billion in SST, or 1.8% of GDP, in line with higher consumer and business confidence.
Ganesh said the increase in room rates will vary for different budget hotels depending on their ratings.
"The increase will vary for the hotels depending on their operations costs.
"Hoteliers will always ensure a 50% profit margin," he said.
The rates are RM80-100 per room in a one-star hotel, RM100-150 (two-star) and RM200-250 (three-star).
MyBHA has 2,700 members.
Ganesh said some hoteliers have already raised their rates to cover costs.
"If they are raising prices it is because of the economic situation and decrease in the profit margin.
"There is also the minimum wage, issues with illegal short term rental accommodation (STRA) and other factors."
He said a letter will be sent to Domestic Trade and Cost of Living Minister Armizan Mohd Ali.
"We want the government to regulate the STRA and ensure proper guidelines for the industry.
"This is to curb the unlicensed accommodation owners and providers to ensure a level playing field," Ganesh added. – April 15, 2024.
