‘Changing from GST to SST to affect hotels’
MIRI: The Pakatan Harapan (PH) federal government’s policy to zero rate the goods and services tax (GST) this month and switch to the 10 per cent sales and services tax (SST) in September will affect hotel operators.
Malaysian Association of Hotels Sarawak chapter honorary secretary-general John Teo cited the example of Meritz Hotel, where he is general manager, which invested RM12,000 to upgrade and add GST to its point of sales (POS) machines and hotel accounting system two years ago.
“We, as well as other hotels, have faced another task, which is to get the IT (information technology) engineers to come in and adjust the 6 per cent GST to 0 per cent GST.
“With that being said, we had to update all the menu pricing from inclusive of 6 per cent GST to 0 per cent. Such changes not only change all the pricing in the menu, that must minus the 6 per cent GST, the IT engineers need to also change all the pricing in the POS machines, as well as all the back office accounting systems,” he explained in an interview.
“To be honest, it wasn’t the easiest task, as all these needed to be done starting from 11.59pm on May 31 until the next morning, which the whole process took us at least six hours to complete. The amount of time is only the minimal standard for three-star to five-star rated hotels with at least 200 rooms and a coffee house and dine-in restaurant.”
Teo pointed out hotels would need to call in IT teams again by Aug 31 to adjust their systems for SST.
“We will, therefore, need to readjust all our pricing again to have all the prices inclusive of SST and that includes changing the food menu, and room pricing again, as per instruction from the Customs Department that they only want to see the nett price only on all billing,” he said.
Teo opined that the zero rating of GST would unlikely attract more guests to star-rated hotels.
“The main problem is that there are just too many unlicensed motels and inns all over Sarawak. These unlicensed accommodation services are much cheaper to operate, with that being said, without Bomba (Fire and Rescue Department) approval, local council occupation permit (OP), and without proper security provided to the safety of the guests – they could easily sell their rooms at well below licensed hotel pricing,” he complained.
He explained that licensed hotels would have to charge at least RM160 to RM280 per room to cover costs, while unlicensed motels or inns with their much lower costs in operating can afford to sell their room rates at RM65 to RM135 per night.
“Another contributing factor to the better occupancy rate at unlicensed motels and inns is the current downturn of the Sarawak economy. Honestly speaking, people are looking at the pricing that they need to spend in staying in a hotel,” he added.
Teo also called on the federal government to take action against unlicensed hotels.
“It is important for the new government to note that almost all of these unlicensed accommodation providers do not have fire rated-doors for their rooms, no security guard provided to guard the guests, no escape staircase for them to run to safety in case of fire, and most importantly, most of these motels and inns are shoplots converted with only one staircase to go up and down.
“As a matter of fact, the association had voiced out much on the unlicensed accommodation providers, as it could potentially further damage the image of all accommodation providers in Sarawak. Thus, we are hoping that the local councils all over Sarawak take this problem seriously and rectify the major problems, as a way to further improve tourism development in Sarawak,” he said.
On Visit Miri Year 2018, Teo pointed out tourist attractions here were poorly maintained.
“This is very sad because it really gives an unpleasant impression to tourists visiting Miri. The local council must take the initiative to make sure that they can show a bit more concern on the city that they are looking after,” he added.
He also called on the Sarawak Tourism Board (STB) to not just focus on Kuching.
“Take Miri and Sibu, the STB officers would usually say that Sibu and Miri have no adequate products for them to promote, which caused them to sell only Kuching,” he complained.
“Promoting Sarawak should be done wholesomely inclusive of all the major cities and towns in Sarawak, instead of only Kuching.”
With that being said, we had to update all the menu pricing from inclusive of 6 per cent GST to 0 per cent. Such changes not only change all the pricing in the menu, that must minus the 6 per cent GST, the IT engineers need to also change all the pricing in the POS machines, as well as all the back office accounting systems. — John Teo, Malaysian Association of Hotels Sarawak chapter honorary secretary-general