JOHOR BARU: The move to raise excise duties on alcoholic beverages may drive tourists to neighbouring countries where liquor is cheaper, say industry players who worry the hike could dampen Malaysia’s tourism appeal.
Malaysian Tour Guides Council president Jimmy Leong said the move, announced under Budget 2026, may boost government revenue but it risks making the country a “second choice” destination for travellers, including domestic tourists.
“Tourists come here for a holiday and cultural drinking is common among them. With a hike in prices of alcoholic beverages, there is a possibility that we will be viewed as a second choice for holidays,” he said when interviewed.
Leong said that higher alcohol prices could also hurt businesses that rely on tourist spending, especially pubs and entertainment outlets.
“Tourists will shy away from destinations such as Langkawi. This is also partly why Malaysians choose our northern neighbour for their holidays,” he said.
Johor Entertainment Outlet Operators Association chairman Tan Yam Meng said the new tax would further squeeze profit margins in an already challenging business environment.
“Business is tough as it is with soaring operating costs these days such as employee salaries, electricity tariffs, raw materials and licensing fees,” he said.
He said some operators might absorb the higher costs while others could pass them on to customers, depending on their business strategy.
Despite the challenges, Tan said he preferred to look at the bright side.
“The rationale is, when prices go up, people will drink less.
“But Johor Baru is in a unique position. It is a preferred destination for Singaporeans as drinks are still cheaper here than in the republic,” he said.
