KUCHING: Hotels across Sarawak are preparing to adjust their room rates in light of the impending revision of the Sales and Service Tax (SST) to 8 per cent and external factors.
Malaysian Association of Hotels (MAH) Sarawak Chapter chairman John Teo said the increase in SST would primarily impact hotel guests rather than hoteliers directly.
“The increase in SST will not affect the hoteliers much, as the SST is being paid by the hotel guests.
“The hotels will collect the SST on behalf of Royal Malaysian Customs Department, alleviating some of the financial burden on establishments themselves,” he said in a statement.
According to Teo the transition to the endemic phase of Covid-19 in Malaysia on April 1, 2022, was a pivotal moment for businesses, including the hospitality industry.
“After enduring nearly two years of lockdowns during the Movement Control Order (MCO) period, hoteliers and other sectors have been trying to recover lost ground.
“Throughout this period, hoteliers have implemented various strategies to stimulate demand, including promotional campaigns and collaborations with government initiatives such as Sia Sitok,” he said.
Despite efforts to maintain competitive pricing, he said external factors have put pressure on operational costs, leading to an inevitable upward adjustment in room rates.
He attributed the factors to inflation, fluctuations in commodity prices, supply chain disruptions, currency devaluation, and increased operational expenses.
“The recent drop in the value of the ringgit has made it more expensive to bring in raw materials and finished food products. We need to understand that almost all the hotel supplies are from overseas such as China and Thailand,” he added.
As a result, hoteliers find themselves compelled to raise prices to ensure the sustainability of their businesses.
He said proposals have been made to adjust room rates by 15 to 30 per cent from pre-Covid-19 levels, with specific minimum rates set for different hotel categories.
“Sarawak hoteliers have been advised to adhere to minimum pricing standards, with 5-star rooms priced at a minimum of RM420 and above, 4-star rooms at RM220 and above, and 3-star rooms at RM160 and above.
“Achieving a room occupancy rate of 55 per cent or higher is deemed essential for hotels to operate profitably under these circumstances,” he said.
Recent statements from MAH National President Christina Toh have indicated that hotel rates could surge by as much as 30 per cent.
This projection takes into account not only the SST hike but also the ripple effects of price increases across various sectors, including logistics and other operational expenses.
