KUALA LUMPUR, Feb 26 — Hoteliers’ prediction of up to 30 per cent higher room rates due to the increase in sales and service tax (SST) should not weigh down the local travel industry, groups said.

Malaysia Tourism Federation president Datuk Tan Kok Liang said that the plan to increase the room rates were due several factors including high operating costs and inflation, among others, which were exacerbated by the increase of the SST from 6 to 8 per cent.

“We cannot predict the impacts but obviously nobody likes to pay higher prices.

“In the short term, there will be no major impact because our currency is at the lowest and visa-free policies are able to attract foreign tourists from major source markets,” he said.


However, Tan said domestic tourism could be affected by the predicted increase, adding that he hoped hotel operators would consider alternate pricing for local travellers.

He also said public stakeholders could be more proactive with domestic tourism campaigns as a response.

Consortium of Inbound Tourism Alliance executive chairman Uzaidi Udanis said the government could also provide incentives and vouchers to spur domestic tourism to mitigate the effects of raising the SST.


He also suggested that the Domestic Trade and Cost of Living Ministry closely monitor room rates for unreasonable and unjustified increases.

“I mean we don't want some sectors to take advantage of this issue. They want to hike up the price unnecessarily,” he said.

Apart from the government, he said it was also important that the industry also put in the effort to make domestic tourism the preferred choice for local travellers.

While he said it was understandable that hoteliers would want to raise their room rates in response to the SST, this should not be to the extent that it would deter Malaysians from travelling within their own country.

“We understand that what we need is to get more foreign tourists to come in.

“However, we also cannot forget the domestic market which has a huge market and this domestic market we are also facing problems of them going to other places like Hat Yai (Thailand),” he said.

On the other side, consumer groups were less receptive of the planned increases, saying the cost of domestic tourism was already high.

Consumer Association of Subang and Shah Alam president Datuk Seri Jacob George said it was important to bear in mind that Malaysia was competing with many other Asian countries as tourism destinations.

“I don't see anything positive coming out of the scenario and I was flabbergasted when they heard that they're talking about popping up costs.

“And I think the hoteliers are not honestly here to service tourists, they're talking about looking at their balance sheets,” he said.

Citing Kedah’s Langkawi that was once a prime tourist destination but which now faced falling arrivals, George said the decline could be reflective of Malaysia’s waning competitiveness to regional rivals.

George added this could prompt Malaysians travellers to consider going out of the country for their holidays, with a preference for Indonesia, the Philippines, and Thailand.

“Because the other problem is that we have also had a shortage of workers, qualified workers, English-speaking workers, bilingual workers.

“These are very good and service orientations and hotels, restaurants need this, we are backward compared to neighbours.

“And I can tell you the countries who are moving up and bringing in stuff from overseas, even in those countries because they speak better English, they look better than international flavour. So, that is what we are competing with,” he said.

He then pointed out that the government should step in and develop a white paper in consultation with all stakeholders and develop a policy blueprint to restore Malaysia as a global tourist destination.