GEORGE TOWN, Jan 17 — The Malaysian Association of Hotels (MAH) is asking for more transparency from the Penang government on how the hotel fees collected were being utilised.

Penang chapter chairman Datuk Tony Goh said the initial purpose of the hotel fees, introduced in 2012, was to improve funding for the state government to promote tourism for Penang.

"The whole purpose of the hotel fees was to promote tourism for Penang and there used to be a committee, consisting of the chief minister, the tourism state exco and representatives from MAH, that would decide on how the collected fees was used,” he said when contacted by Malay Mail.

He said the hotel fees were mooted in 2012 when Penang was an opposition state and did not have enough funds to promote tourism at that time.

Hotel fees of RM3 per night per room were imposed on 4-star hotels while the fee is RM2 per night per room for 3-star hotels and below from 2014 onwards.

"The hotel fees were a way to collect our own funds in a hotel fee account and it is very transparent as the city council will inform the committee the total amounts collected,” he said.

He said the committee would have meetings to approve funding only for tourism promotion events from the hotel fees collected, but meetings were not held during the pandemic years and the hotel fee collection was suspended for two years.

"After the pandemic, as we are slowly recovering from it, we were the ones to propose that the hotel fee be reinstated so that we can start collecting funds for the hotel fee account to use for tourism promotion,” he said.

However, he said no meetings were called and by the end of 2024, they found out that the committee was quietly dissolved without them being informed.

He said they were also not informed that starting from late 2023, all of the hotel fees collected no longer goes to the hotel fee account but instead went directly to the state government’s consolidated revenue.

"There is no transparency anymore. We do not know how much was collected, how much was disbursed and what the funds were used for,” he said.

He said this was not the purpose of the hotel fee that the hotels had agreed to back in 2012.

"The main issue here is that the fund collected must only be used for tourism and nothing else, which is the original purpose and objective, which is also the reason for hotels to be the collecting agents,” he said.

He said the fees should not even be for tourism infrastructure or operational costs as the state government should be able to take care of that.

"Unless this hotel fee is used for tourism objectives, I see no reason why the hotels are made to do the collection when they can have other alternatives to do so,” he added.

Goh said the recent news report that the state government is considering increasing the hotel fee by at least 50 per cent also came as a shock to them.

"There were no discussions with MAH and I have written to the chief minister’s office since November last year to meet and discuss the hotel fee issue but I have yet to receive a response,” he said.

He said the collection of the hotel fee, which was added to the hotel room rates, has become a burden to hoteliers.

"Moreover, the state government must look into ensuring short-term rental (STR) accommodations are also doing collections to contribute to the industry of which they are benefiting from,” he said.

He said the state is collecting hotel fees from all hotels and yet STR does not have to pay the fee.

"If STR pays the hotel fees too, the state may not need to increase the fees at all as these will be additional fees collected,” he said.

He said if the state is collecting RM10 million in fees from hotels currently, the state could probably get another RM3 million in fees from STR.

He stressed that MAH is not against the increase of hotel fees as long as there is transparency on how the fees are being used and that the fees are only used for tourism promotion purposes.

He said the state must also be fair across the board and collect from STR too since the STR owners are also gaining profits from the tourism industry.

He said more than 1,000 hotel rooms are coming up this year and though tourism numbers have improved since the pandemic, the arrivals were still not the same as pre-pandemic times.

This meant that the hotels are not always full and that they only see full occupancy during holiday seasons while during off-peak seasons, occupancy rates were still low.

Meanwhile, when contacted, Association of Tourist Attractions Penang (ATAP) chairman Datuk Ch’ng Huck Theng also said the state should look into charging STR the room fees too, similar to hotels.

He said the fees collected must also go back to the industry in terms of promoting tourism for the state.

"That was the initial agreement when the hotel fees were introduced, so the funds should go back to tourism promotions and not go into the state’s revenue,” he said.

During the May 2024 state legislative assembly, it was revealed that a total RM72 million had been collected (up to April 2024) from hotel fees since it was imposed in 2014.

State exco for tourism Wong Hon Wai also told the legislative assembly that the fees collected will be included in the state consolidated revenue account as state revenue from the end of 2023 onwards.