Tax will affect local travellers most, says hotel manager
MIRI: The implementation of Tourism Tax beginning July 1, by the federal government has met with objection from tourism industry players in the state.
General Manager of Meritz Hotel and Bintang Megamall, John Teo pointed out that nearly 90 per cent of hotel guests here are Sarawakians who were mostly on business travel.
“If you analyse the statistic, it would show that there is only less than five per cent foreign tourists while another five per cent were from other states of Malaysia.
“Most of foreign tourists visiting Sarawak are backpackers and travel on budget. This means that while they are here, they are likely to stay at budget homestay. Thus, the tax is mostly taxing Sarawakians and West Malaysians,” he told The Borneo Post yesterday.
Teo warned that with the decline of oil and gas industry many the oil companies have left Sarawak especially here.
“This has affected all the starrated hotels here and also other smaller hotels by at least 35 per cent decline in their hotel occupancy.”
“Before the end of 2015, Miri Hotel occupancy rate had always been above 73 per cent. However, since January 2017 until last month, the average of occupancy rate for all star-rated hotels has dropped to 42 per cent,” Teo said.
He added that star-rated hotel will need at least 55 per cent room occupancy rate to breakeven their businesses.
With the implementation of Goods and Services tax ( GST) two years ago, hotel operators are already paying six per cent tax to the government.
“The setting up of the GST accounting system has cost us, the industry players tens of thousands ringgit. With the coming tourism tax, it would mean that hoteliers will need to set up another accounting system to collect the tax for the government, costing up to another tens of thousands of ringgit.”
Another reason to object the tourism tax, according to Teo, is that there are too many unlicensed motels, inns and homestays in the state.
These smaller accommodation services usually pay only residential rates for utilities while hotels have to pay all sorts of regulatory fees.
“It very unfair that with the implementation of tourism tax tourists have to pay between RM5 and RM20 extra to stay at hotels. They may choose to stay at homestay or budget lodging where they could possibly avoid paying tourism tax.”
Teo added travelling to Sarawak already cost much more than travelling to other tourist destinations such like Bali, Bangkok Hong Kong or Taiwan.
“Introducing tourism tax could cut down our competitiveness of pricing against other tourism destinations. Therefore, it is imperative to make sure that Sarawak is able to compete in terms of facilities for tourists before thinking of trying to tax its own people further through the new tax,” said Teo who is also the honorary secretary-general of Malaysia Association of Hotels (Sarawak Chapter).