PETALING JAYA: With the increasing demand for domestic travel, incentives and funding in Budget 2023 need to be improved so that the tourism industry can provide better infrastructure and services for their customers, say travel industry experts.
Malaysian Association of Tour and Travel Agents (MATTA) president Datuk Tan Kok Liang said after two years of closure of the country’s borders due to Covid-19, many tourism infrastructure are in need of improvement.
As such, he hopes that Budget 2023 will provide incentives and funds for tourism players and related facilities.
“This includes hotels, resorts, lodges, rural homestays, tour operators and other service providers so that they can meet the demand of modern Malaysian travellers,” he said in an interview.
He was commenting on the rise in tourism activities in the country.
On Saturday, Tourism Malaysia deputy director-general (Planning) Iskandar Mirza Mohd Yusof said the demand for domestic tourism has picked up, especially during school and public holidays.
He added that Tourism Malaysia received positive feedback from several exhibitors during the three-day long “Jom Cuti-Cuti Malaysia” roadshow.
Tan hoped that the development of domestic travel infrastructure and services can be improved by March next year, such as roads and telecommunication.
He added that the industry was facing challenges such as labour shortage and increasing operational costs.
He said the government should look into implementing tax relief and incentives for domestic travel in Budget 2023.
“Incentives can encourage more domestic travel such as corporate groups travelling for meetings and events, while families that travel can claim tax relief,” Tan said.
Malaysian Budget and Business Hotel Association president Dr Sri Ganesh Michiel said despite high occupancy rates at budget hotels, hoteliers are operating at small profit margins or even at a loss.
He added that such hotel operators are facing challenges, including low rates offered on online booking mobile applications, in addition to competition from unlicensed hotels.
“Almost 90% of tourists book their rooms from online booking platforms and the rates offered are much lower than walk-ins.
“These online booking platforms have an Artificial Intelligence system that compete to offer the lowest price to consumers, which result in lower profit for hotels despite them having full occupancy,” he added.
With lower revenue, maintenance and service quality will be impacted.
Ganesh suggested that the government consider setting a minimum price for hotel rooms based on their star rating.
Other suggestions for Budget 2023 included increasing the SST threshold value for the hotel industry from RM500,000 to RM1.5mil, introduce a special electricity tariff for the tourism industry as well as providing financing and tax incentives for them.