Hotelier: Many factors contribute to rising room rates, not just SST hike
There are many factors contributing to the increase in hotel room rates, including inflation, currency depreciation and supply chain disruptions, says Malaysian Association of Hotels (MAH) Sarawak Chapter chairman John Teo.
He cited MAH national president Datin Christina Toh’s statement about the likelihood of hotel rates to increase by as much as 30 per cent in consideration of not only the revision of the Sales and Services Tax (SST) to eight per cent, but also the price increase in goods and logistics.
“Hoteliers have no choice but to increase the selling price on all the rooms for sales, as well as in their food and beverage outlets. Otherwise, majority of hotels would not be able to sustain,” he told thesundaypost here.
The identified factors contributing to the increase in hotel room’s price include high inflation on costs of goods of between 30 per cent and 200 per cent; fluctuations in commodity prices of between 30 per cent and 80 per cent; supply chain disruptions; depreciation of the ringgit; imported inflation; higher business expenses such as minimum wage hikes and increased utility bills; as well as the rise in prices of hotel items such as food and beverage supplies and room amenities.
Teo pointed out that the drop in the value of ringgit had made it more expensive to bring in raw materials and finished food products into the country.
“Almost all of the hotel supplies are sourced from overseas such as China and Thailand.”
In consideration of all the factors, Teo said a proposal to increase the previous preCovid-19 hotel room’s pricing to between 15 per cent and 30 per cent was ‘unavoidable’.
He further stressed that all hotel operators had been struggling to maintain business since Covid-19 broke out four years ago, and various promotions had been rolled out to attract customers, while maintaining the old pricing for hotel rooms, and food and beverage outlets.
On that note, Teo said hoteliers in Sarawak were reminded to sell their fivestar rated hotel rooms at the proposed minimum rate of RM420, four-star rated at RM220, and three-star rated at RM160.
“This will ensure that hotels are able to sustain their businesses. With a room occupancy rate of 55 per cent and above, a hotel can then be managed at a profit,” he said.
Teo, however, pointed out that the revision of SST from six to eight per cent would not pose a big impact on hoteliers as the tax would be ultimately paid by hotel guests, and the hotels would only collect the SST on behalf of the Royal Malaysia Customs Department.