Associations: Illegal hotel issue needs to be addressed quickly

Sort out the issue: Shaharuddin and Cheah are hoping the government takes quick action on the illegal hotels problem.

PETALING JAYA: The government has to act quickly in addressing problems about illegal hotels, says Malaysian Association of Hotel Owners executive director Shaharuddin M. Saaid.

“Illegal hotels are rampant in Malaysia. I think the illegal ones are more than the legal ones. It is getting out of hand.”

“We met the Housing and Local Government Ministry several times. They agreed that there is a need to address the issue. These hotels need to be registered, regulated and monitored.”

“But I think the government needs to act faster,” he said when contacted.

Shaharuddin pointed out that budget hotels and hotels below two stars rating were the ones most affected by illegal operators.

“These illegal hotels are having a good time doing business. They do not need to follow the regulations, do not need to pay taxes, nor collect the Sales and Service Tax (SST),” he said.

Without quick action from the government, he said more illegal operators would emerge, making it much more difficult to regulate the situation.

Shaharuddin also felt that many guests staying at illegal hotels were not aware of the risks they were facing.

“For proper hotels, it is compulsory for us to register our guests. We have to show this to the police if they come to us. It may not be the case with illegal hotels or homestays.”

“The hotels have to follow rules on fire safety. Every room has a sprinkler too,” he said.

He said the illegal ones might not even have security guards and CCTV.

“It will be problematic if there is fire, break-in or crime case. Insurance companies may not compensate guests living in those premises,” he warned.

Asked how the public could differentiate between legal and illegal hotels, Shaharuddin said a legal operator would, for example, have proper signboards.

“They will have a lobby and also show their permit or certificates at the reception area. For rate hotels, consumers can double-check on the Tourism, Arts and Culture Ministry’s portal,” he said.

Malaysian Association of Hotels president Samuel Cheah Swee Hee said the problem of illegal hotels was common in the country.

“We don’t have the exact statistics but what we know is that they are all over the country in the form of homestay, citystay or home-sharing.

They operate without proper licensing,” he said when contacted.

Cheah believed that more illegal hotels have come up since home-sharing platforms become popular in Malaysia.

“For people who stay at these hotels, they are doing so at their own risks. Unlike the legal hotels, these illegal ones may not follow strictly the regulations and requirements especially the ones related to safety,” he said.

“For example, some of these illegal hotels may use plywood, which could be a fire hazard, as wall partitions. Legal hotels have stringent regulations to follow. The door has to be a ‘fire-rated door’. A fire safety system has to be installed too,” he added.

Cheah said the ministry had engaged with the association to discuss ways to better regulate the illegal hotels.

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