Expect to pay more for Johor hotels from March due to tax hike

Expect to pay more for Johor hotels from March due to tax hike
Hotel prices in Malaysia are expected to rise about 10 to 30 per cent following the increase in Sales and Service Tax rate, starting March 1.
PHOTO: The Straits Times

Be prepared to pay more for your next hotel stay in Johor.

Hotel prices in Malaysia are expected to rise up to 30 per cent following an increase in Sales and Services Tax (SST) from Thursday (March 1), Malaysian news outlet Sinar Daily reported. 

Malaysian Prime Minister Datuk Seri Anwar Ibrahim had announced an eight per cent increase in SST in the 2024 Budget last year.

Malaysian Association of Hotels (MAH) President Datin Christina Toh told Sinar Daily that besides SST, peak season factors such as school holidays or celebrations could also impact the increase in hotel prices, Toh said.

'The increase has no effect'

Toh added that among Asean countries, "Malaysia has one of the lowest hotel room rates in the market".

And despite the price hike, Toh is positive about the tourism sector, highlighting the various ongoing promotions and government support, such as visa exemptions for specific nationalities.

"The increase has no effect. That is one of the reasons why we want to attract more foreign tourists to our country because our prices are still reasonable," she told Sinar Daily. 

Malaysian Association of Hotels (MAH) Johor Chapter chairman Ivan Teo told The Star that he does not foresee any problems with the increase in hotel room rates especially for guests from Singapore, China, Thailand and Vietnam.

However, he said that some hotel operators may face difficulty explaining the price hike to Indonesian guests due to the rupiah-ringgit exchange rate.

Offer visa-free entry to tourists

Teo said that Singaporeans still account for the majority of travellers to Malaysia, due to the favourable exchange rate.

According to Teo, there has also been an uptick in visitors from South Koreans staying in hotels in Johor, especially golfers and those wanting to escape the harsh winter.

Lotus Desaru Resort chief executive officer R. Indra Ghandi told The Star that instead of a price increase, their room rates would include the sales tax, starting from March 1.

"We have been charging nett rates for our hotel rooms. Consumers are price sensitive, so they will react if we were to increase our rates," she added. 

She proposed that the government offer visa-free entry to tourists from countries other than China and India.

'The government should reassess the situation'

Indra also hoped that Johor Menteri Besar Onn Hafiz Ghazi, who has taken over the tourism portfolio, would organise events to attract more visitors from South Korea, Japan, Taiwan and India.

"There are 300 million (people) in India categorised as the middle-income group. It is a huge market if we can attract them to visit Johor," she said.

On the other hand, some express concern that the rise in hotel prices could adversely affect the number of tourists visiting the country. 

AMK Holidays Sdn Bhd travel agency director, Amirullah Kamarudin, told Sinar Daily that the rise in hotel prices could also discourage tourists from choosing Malaysia as their vacation destination.

"The government should reassess this situation. While urging the public to take vacations to support economic recovery, the surge in hotel prices poses a challenge to the tourism sector," he said.

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