The revision of SST from six to eight per cent will not pose a big impact on hoteliers as the tax is ultimately paid by hotel guests, said Teo. – Pixabay photo
KUCHING (Feb 24): A myriad of factors are contributing to the increase in prices for hotel rooms, including inflation, the ringgit’s depreciation and supply chain disruptions, said Malaysian Association of Hotels (MAH) Sarawak chapter chairman John Teo.
He said MAH National presidential Datin Christina Toh was recently reported to have said hotel rates are expected to increase by as much as 30 per cent in consideration of not only the revision of sales and service tax (SST) to eight per cent but also the price increase in goods and logistics.
“Hoteliers have no choice but to increase the selling price on all the rooms for sales, as well as in their food and beverage outlets. Otherwise, majority of hotels will not be able to sustain,” he told The Borneo Post.
John Teo
The factors contributing to the increase in hotel room’s price are high inflation on costs of goods of between 30 and 200 per cent; fluctuations in commodity prices of between 30 and 80 per cent; supply chain disruptions; the ringgit’s depreciation; imported inflation; higher business expenses such as minimum wage hikes and increased utility bills; the rise in prices of hotel items such as food and beverage supplies and room amenities.
Teo pointed out the drop in the value of ringgit has made it more expensive to bring in raw materials and finished food products into the country, and almost all of the hotel supplies are sourced from overseas such as China and Thailand.
In consideration of all the factors, he said a proposal to increase the previous pre-Covid-19 hotel room’s pricing to between 15 and 30 per cent was unavoidable.
He further stressed that all hotel operators have been struggling to maintain their business since the Covid-19 outbreak four years ago, and various promotions have been rolled out to attract customers while maintaining the old pricing for hotel rooms, and food and beverage outlets.
On that note, Teo said hoteliers in Sarawak are reminded to sell their five-star rated hotel rooms at the proposed minimum rate of RM420, four-star rated at RM220, and three-star rated at RM160.
“This will ensure that hotels are able to sustain their businesses. With a room occupancy rate of 55 per cent and above, a hotel can then be managed at a profit,” he said.
Teo however pointed out that the revision of SST from six to eight per cent will not pose a big impact on hoteliers as the tax is ultimately paid by hotel guests, and the hotels are to only collect the SST on behalf of the Royal Malaysia Custom Department.
