Ganesh
KOTA KINABALU (Mar 3): The Malaysia Budget & Business Hotel Association (MyBHA) strongly objects to the sudden and exorbitant increase in licensing fees imposed on hotels and lodging houses in Kota Kinabalu.
This decision, which reinstates the Kota Kinabalu Municipal Council (Hotel and Lodging Houses) By-laws, 1966, is highly unreasonable and threatens the survival of hotels in the locality and state, said Dr Sri Ganesh Michiel, the National President of Malaysia Budget & Business Hotel Association (MyBHA).
According to Ganesh in a statement on Monday, for decades, hotels in Kota Kinabalu have been paying a fair and reasonable licensing fee of RM10 per room per year, as directed by the Cabinet in 1989. However, the recent decision to revert to the 1966 rates ranging from RM40 to RM140 per room per month based on hotel classification and occupancy has placed an unbearable financial burden on hotel operators.
For example, under the new rate structure:
A 100-room hotel classified as a 2nd Class Hotel would now have to pay RM80 per occupied room per month.
If the hotel achieves an occupancy of 60% or 1,860 room nights per month, the monthly licensing fee would be a staggering RM4,800 a month or RM57,600 per year— a drastic increase from the previous RM1,000 annual fee.
This is an unjustified and unsustainable cost increase that will lead to the closure of many hotels in Kota Kinabalu, causing job losses and reducing affordable accommodation options for travelers.
Ganesh, who is also Secretary General of Malaysian Tourism Federation (MTF), added the increase in licensing fees is made even more unfair by the lack of enforcement on unlicensed short-term rental accommodations (STRA), such as those operating through online platforms.
“Hotels are heavily regulated, requiring licenses, tax payments, and adherence to strict health and safety regulations.
“In contrast, STRA operators face no similar enforcement or taxation, despite competing directly with hotels and benefiting from the same tourism market.
“This creates an unlevel playing field, where legal hotels are punished with high fees, while unlicensed accommodations operate freely without any financial burden,” he said.
Ganesh also said MyBHA has repeatedly urged the State Government, local authorities, and the Ministry of Tourism, Culture, and Environment Sabah to address the STRA issue, yet no significant action has been taken. This double standard is pushing hotels to the brink of collapse.
Given the dire consequences of this decision, he said MyBHA urgently calls upon the State Government of Sabah, Kota Kinabalu City Hall (DBKK) and all relevant stakeholders to take the following actions immediately:
Reinstate the RM10 per room per year licensing fee that has been in place since 1989, ensuring affordability and sustainability for the hotel industry.
Immediately suspend the enforcement of the increased licensing fees to prevent undue financial distress and allow proper engagement with industry stakeholders.
Provide a grace period and consult industry players before implementing any drastic policy changes that impact hotel operators.
Strictly regulate and tax STRA operators to create a fair business environment and prevent hotels from being disadvantaged.
Ganesh said if this issue is not addressed, it will have serious repercussions on Kota Kinabalu’s tourism industry. Investors will avoid the city due to unfavorable business conditions, and hotels which are essential for attracting domestic and international travelers will continue to suffer.
“Sabah has always been a premier tourism destination, and affordable accommodations play a crucial role in supporting the state’s tourism growth. Punishing hotels with excessive fees while allowing unregulated STRA to flourish contradicts the government’s commitment to fair business practices and tourism development,” he said.
MyBHA urges all hotel operators, tourism stakeholders, and elected representatives to voice their objections against this unfair policy.
“We call upon the Sabah State Government to act swiftly in resolving this crisis before it causes irreparable damage to the hospitality industry.
“We stand firm in defending the rights of hotel operators and ensuring a fair, competitive, and thriving tourism ecosystem in Kota Kinabalu,” Ganesh added.
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