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Budget hotels may increase rates by 30 to 40pct, says MyBHA

Publish date: Mon, 15 Apr 2024, 11:14 PM

KUALA LUMPUR: Malaysian Budget and Business Hotel Association (MyBHA) has warned that budget hotel owners are likely to hike up their rates in the months to come as operational costs rise.

Its president, Sri Ganesh Michiel said hoteliers could go up between 30 to 40 per cent over the next three months owing to multiple factors that were reflected in the operational costs.

"The rates would not drastically go up, let's say from RM100 to RM200; however due to the operational costs, hoteliers need to adjust their rates accordingly.

"This is due to the knock-on effect from the cost of goods and services and if the hoteliers do not adjust their rates, might as well they cease business," he said.

He said that hoteliers had to adjust their operational costs based on the rates of utilities, laundry, software use, maintenance and many others.

"For example, hoteliers now have to use the e-invoice system. They need to source for vendors (of the software) and send their employees to training.

"It costs money, and it is a failure by the regulators to make sure that hoteliers could afford this," he said.

As such, he also called for regulators to ensure that the knock-on effect from the rising costs of other utilities and services was curtailed.

"For example, the utilities, Tenaga Nasional Bhd, should introduce a special tariff on budget hoteliers when they announce the rise in tariffs.

"Regulators need to help control the operational costs from rising."

When asked whether the revision of the service tax (SST) from six to eight per cent was one of the factors in rising operational costs, he said that it was only a part of the issue.

The country had on March 1,increased the SST by two per cent to eight per cent from six per cent.

Prime Minister Datuk Seri Anwar Ibrahim on March 26 said that inflation would not be significantly affected by the two per cent hike in the SST.

He said around RM3 billion in revenue would be generated from the increase in the SST from six to eight per cent.

He had also said that the increase in SST was mostly targeted at discretionary and service-related interbusiness transactions that had little direct effect on customers.

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