Report: New tourism tax could hurt hotel operators


PETALING JAYA: A new tourism tax bill passed by Parliament last week could hurt hotel owners, including Genting Malaysia Bhd and Sunway Real Estate Investment Trust (REIT), CIMB Research said in a report.

The bill will allow the government to impose a tourism tax on a tourist staying at any accommodation premises made available by an operator at the rate fixed by the minister in accordance with the law.

“It is not clear when the new tourism tax will take effect,” CIMB Research said.

Potential revenue from the new tax would be around RM654mil, if an occupancy rate of 60% can be achieved for the 11 million “room nights” available in the country, according to Tourism and Culture Minister Datuk Seri Nazri Aziz.

A higher occupancy rate of 80% will boost collections to RM872.8mil.

The tax, Nazri said, will provide a sustainable fund for the development of the tourism industry.

CIMB Research, however, viewed the latest tax measure as a negative development for the hotel sector that could lead to an “uneven playing field” between licensed and unlicensed hotel operators.

“Hoteliers may not be able to pass on all the additional tax to the tourist as the hotel occupancy rate in the country was only 61.9% in 2015,” it said.

Among stocks under its coverage, Genting Malaysia, Sunway REIT and KLCC Property Holdings Bhd may be negatively impacted by this new development, assuming that the new tax to be imposed is absorbed by the companies.

“However, our estimates reveal that the potential earnings impact from this development is minimal,” at 1%-2% of next year’s net profit.

Genting Malaysia currently has seven hotels with more than 10,000 rooms in total.

As at end-2016, the group’s average occupancy rates stood at 93%.

Sunway REIT owns five hotels with 2,090 rooms in total, which achieved average occupancy rates of 66.7% last year.

KLCCP owns the five-star Mandarin Oriental Kuala Lumpur, which has 632 rooms.

The report said the Malaysian Association of Hotels was briefed about the new tax in January.

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Subscribe now to our Premium Plan for an ad-free and unlimited reading experience!

Business , Tourism tax , hotel

   

Next In Business News

Stocks, oil skid as China's COVID protests roil sentiment
Cushioned from global impact
Bursa likely to trend higher on foreign funds
The Week Ahead: 3Q earnings , PMI, inflation
Caution despite typical year-end stock rally
Effective social protection system vital
News Corp shareholder concerned about Fox merger
What’s in it for me? – A consumer’s perspective on digital banking
Strong demand for gold jewellery from Singapore
Germany’s Brenntag in takeover talks with US rival

Others Also Read