Kuala Lumpur, 31st December 2024 – As we bid farewell to 2024, we do so with a heavy
heart as numerous pressing issues within the hospitality industry remain
unresolved. This sector, a cornerstone of our nation’s economy, continues to face
challenges that could have been addressed with proper attention and decisive action.
One of the most significant concerns is the failure to regulate Short-Term Rental
Accommodations (STRA’s). The rapid growth of this sector has disrupted the stability
of licensed and registered accommodation providers, creating an uneven playing
field. The lack of a robust regulatory framework not only fosters unfair competition
but also tarnishes the reputation of the hospitality industry.
Equally concerning is the failure to regulate Online Travel Agencies (OTAs). These
platforms operate in a manner that often lacks transparency, burdening industry
players with exorbitant commission fees and skewed market dynamics. Without clear
regulations, local businesses are left vulnerable to exploitation, jeopardizing their
sustainability and competitiveness.
We must also address the inability to reintroduce a Single Music Royalty Collecting
Agency. A unified system is essential to ensure fairness, efficiency, and transparency
in royalty collection. The absence of such a framework has left the industry grappling
with unnecessary complexities and added financial burdens.
Additionally, the failure to ensure that all industry disruptions are properly regulated
has left the hospitality sector exposed to unchecked risks. This not only threatens
industry stability but also undermines the government’s ability to efficiently collect
taxes, resulting in significant revenue losses.
Some state governments have also leveraged the hospitality sector by imposing
taxes on hotel guest, yet they fail to provide the necessary protection and
support to the very industry they tax. This approach unfairly burdens licensed
operators while unregulated competitors continue to operate unchecked,
further eroding the industry’s integrity and viability.
Another inefficiency lies in the current method of collecting tourism taxes through
hotels. This approach places unnecessary strain on hotel operators while failing to
maximize revenue collection. A more efficient and equitable solution would be to
collect these taxes at the country’s entry or exit points, ensuring comprehensive
coverage and relieving hotels of this administrative burden. Such a system would
enhance tax collection efficiency and fairness, ensuring contributions from all
travelers, including those who use alternative or illegal accommodations.
As we close 2024, we call upon the government to take these unresolved threats
seriously and to prioritize their resolution by the first quarter of 2025. If these issues
are not addressed, the Visit Malaysia Year 2026 campaign risks falling short of its
potential. To ensure its success, the campaign must benefit only registered and
licensed service and accommodation providers. Failure to achieve this will not only
compromise the campaign’s credibility but also lead to revenue leakage, adversely
affecting the nation’s economy.
We urge the authorities to protect the industry with earnestness, listen to the voices
of industry stakeholders, and act promptly to resolve pressing issues. Failure to
safeguard the hospitality industry will pave the way for unhealthy competition and a
host of detrimental consequences. Let us enter 2025 with a renewed commitment to
strengthening and protecting this vital industry for the benefit of the nation, its
people, the tourist and the tourism industry as a whole.
Happy New Year 2025!
– DR SRI GANESH MICHIEL
National President
Malaysia Budget & Business Hotel Association (MyBHA) cum
Secretary General
Malaysian Tourism Federation (MTF)
