Hike In Hotel Prices Expected Due To Tax Increase

Prices of hotels are expected to increase by 10 to 30 percent due to the recent increase to the Sales and Service Tax (SST), , according to Malaysian Hotel Association (MAH) president Datin Christina Toh.

The hike of hotel prices is expected to happen starting March this year (2024), after the SST is set to increase from six to eight percent.

However, even with the price increase, Malaysian hotels still boast one of the lowest price rates in the Southeast Asian region, said Toh.

According to a report from Malay Mail, Toh compared the hotel rates of Laos to Malaysia, and said that Malaysian hotel rates are still significantly lower compared to hotel rates in countries in the Southeast Asian region.

Toh also stated that other factors might also come into play which will affect the hotel rates, such as peak season factors such as school holidays or celebrations.

Although the price hike is expected, Toh doesn’t expect that the price hike will affect hotel bookings in any way, as there will be upcoming promotions to attract visitors, and government support as well, such as the move to allow visa-free entry for tourists from China, India, and other Asean countries.

Toh’s expectations on price hikes for hotels are also shared by Malaysia Budget & Business Hotel Association (MyBHA) national president Ganesh Michiel, who said that hotel prices might soar by more than 50 percent due to the SST hike.

Ganesh said that the SST hike will have a knock on effect on the entire supply chain of the industry, as it will impact the costs of cleaning services, electricity, water, and transportation.