The Malaysian Association of Hotel Owners (MAHO) expresses deep concern regarding the recent announcement by the Malaysian Association of Hotels (MAH) and the Malaysia Budget and Business Hotel Association (MyBHA) about the drastic increase in hotel licensing fees for registered hotels in Kota Kinabalu. The revised rates, which reinstate the 1966 licensing fees, represent an exorbitant jump from the current RM10.00 per room per annum (for Class 1-3 hotels) to RM4.65 per room per day for Class 1 hotels, RM2.65 per room per day for Class 2 hotels, and RM1.30 per room per day for Class 3 hotels.
This increase will significantly raise operational costs for hotels, which will have no option but to pass these added expenses onto consumers and guests. For example, a 100-room hotel classified as Class 2 will now face a monthly cost of RM80 per occupied room. In cases where a hotel operates at 60% occupancy (1,860 room nights per month), the monthly licensing fee would rise to RM4,800, or RM57,600 annually, compared to just RM1,000 per year previously. This represents a substantial financial burden on the hotel industry.
MAHO is seeking clarification on how the hotel classifications (Class 1, 2, and 3) were determined, as these classifications differ from the official ratings provided by the Ministry of Tourism, Arts and Culture (MoTAC), which uses a 1-5 star system or a 1-3 Orkid rating.
The increase in licensing fees, coupled with other taxes such as the Sales and Services Tax (SST) and Tourism Tax, will push hotel rates higher, despite the fact that these increases are not the result of the hotels themselves but of government-imposed fees. This could negatively impact the tourism sector, particularly in light of the upcoming Visit Malaysia 2026 campaign. Additionally, hotels have been tasked with collecting the tourism tax since 2017, but the benefits of the tax have yet to be seen in the hotel industry.
MAHO also highlights that this licensing fee increase will only apply to registered and licensed hotels, while unlicensed tourism accommodations, such as short-term rental properties (e.g., Airbnb), are not subject to these fees. As of September 2024, Kota Kinabalu has 2,528 active Airbnb listings, compared to just 214 MoTAC-registered hotels. For the past seven years, MAHO, alongside MAH and MyBHA, has been urging the government to regulate and license short-term rental accommodations, which would generate additional revenue for state and local authorities.
The hotel sector has consistently supported government initiatives for tourism promotion and adhered to all business regulations. However, it is disheartening that only licensed hotels bear the brunt of these increasing fees and regulatory burdens. MAHO calls for a level playing field and a fair business environment for all sectors.
MAHO requests an urgent engagement with the relevant authorities to address this issue and urges the suspension or deferral of the new licensing fees.
