Malaysia Faces Higher Hotel Rates Amid Tax Hike, Tourism Sector Reacts

In Malaysia, leaders in the tourism industry are discussing the potential for hotel room rates to increase by up to 30% due to the sales and service tax (SST) going up from 6% to 8%. Despite concerns, they believe the impact on travel within the country will be manageable.

(Photo : Sulthan Auliya on Unsplash)

Malaysia's Hotel Room Rates May Rise, But Tourism Leaders Optimistic

The president of the Malaysia Tourism Federation, Datuk Tan Kok Liang, explained that the rise in costs is due to several factors, including higher operating expenses and inflation. However, he thinks that, for now, the effect on tourism will be minimal because of Malaysia's low currency value and visa-free policies that attract tourists from major countries.

Yet, Tan mentioned that local travel could feel the pinch of the higher prices. He hopes hotels will offer special rates for Malaysians to encourage them to travel within their own country. He also suggested more aggressive domestic tourism campaigns, as reported by Malay Mail.

Uzaidi Udanis from the Consortium of Inbound Tourism Alliance mentioned that the government could help by giving incentives and vouchers to support local travel, thus lessening the impact of the SST increase. He also called for a watchful eye on hotel pricing to prevent unnecessary hikes.

Consumer groups, however, are not happy with the potential price increases. They argue that the cost of traveling in Malaysia is already high and that these additional costs could make Malaysia less competitive than other Asian destinations. They worry this could lead to fewer Malaysians choosing to vacation at home and instead traveling to countries like Indonesia, the Philippines, and Thailand.

These concerns underscore the challenges facing Malaysia as it strives to balance the needs of its tourism industry with the desires of local and international travelers.

A Top Choice for Chinese Tourists

Malaysia is now the fifth favorite place for Chinese tourists to visit worldwide. This country is more popular than ever, especially after Hong Kong SAR, Japan, Macao SAR, and Thailand. Data from Alipay+ and PayNet shows that during the first week of the Chinese New Year, Chinese visitors spent twice as much money as they did in 2019 and ten times more than in 2023.

This spending spree is part of a huge 580% jump in spending by Chinese tourists in 2023 across Thailand, Malaysia, and Singapore.

More Chinese travelers are coming due to new rules that make it easier to visit, like not needing a visa for Malaysia. They're not just shopping or seeing famous places anymore. They also love trying local things, like enjoying local food and drinks, which they spent 70% more on during the Chinese New Year week than in 2019.

Marketing-Interactive says that the partnership between Alipay+ and PayNet makes it easy for tourists to pay without cash, helping Malaysia's shops a lot. With efforts to make tourism even better by 2026, Malaysia is working hard to welcome more visitors.

Other tourists are also spending more in Malaysia, showing a big increase in payments made through Alipay+ this February compared to December 2023. PayNet promises to keep improving to make Malaysia a top destination for travelers from all over the world.