KOTA KINABALU: Hoteliers in Sabah are urging lawmakers to reconsider the new hotel licensing fees imposed last month, which have increased operational costs and threaten hotel businesses.
Malaysian Association of Hotels (MAH) Sabah and Labuan Chapter chairman Hafizan Wong said hotels in Kota Kinabalu are experiencing significant cost increases due to the state's reinstatement of licensing rates under the Hotel and Lodging Houses By-Laws 1966.
“This new hotel licensing fee poses a severe threat to the continuation of hotel businesses, from budget accommodations to five-star establishments,” he said.
Previously, hotel operators paid a licensing fee of RM10 per room per annum.
Under the new structure, fees are based on the City Hall hotel classification and are charged per occupied room per month.
Hafizan said the steep cost increase might force some hotels to reduce services, lay off staff, or even cease operations.
For example, a 100-room hotel classified as second class now pays RM80 per occupied room per month.
If the hotel achieves 60% occupancy, the monthly fee becomes RM4,800, or RM57,600 annually, up from the previous RM1,000 annual fee.
Hafizan called for a balanced approach, urging authorities to address the unregulated market first.
“MAH is aware of the city's desire to balance economic growth with environmental responsibility. Hotels, benefiting from tourist influx, are expected to contribute more," he said.
He asserted that shared prosperity requires all accommodation providers, including Short-Term Rental Accommodations (STRA), to meet the same standards.
Hafizan said the fee hike disproportionately affects licensed hotels, which already adhere to regulations, while many unlicensed STRAs operate unchecked.
Similarly MAH president Christina Toh said if Kota Kinabalu seeks more funds for city upkeep, it should close gaps on unlicensed accommodations rather than penalise licensed hotels.
She added that law-abiding hotels should not bear the financial burden alone.
Toh noted that legitimate businesses face significant costs, including taxes, licenses, and wages.
A decline in revenue would impact the sustainability of these establishments, affecting the industry and tourism sector negatively.
She then said that this could lead to higher room rates, job losses, and reduced investments.
Toh also noted that public misperception might arise if guests blame hotels for price increases without understanding government-imposed fees.
She called for constructive dialogue and solutions, urging state authorities to suspend the new fee until consultation with stakeholders occurs.
She also advocated for a review of the licensing fee structure to support tourism growth and hotel operations, clear regulations for STRA operators, and transitional measures to avoid financial shocks.
