Group Calls For Suspension Of Sabah Hotel Licensing Fee Hike

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It is claimed that hotels in Kota Kinabalu, Sabah, have been forced to pay between RM40 and RM140 per room per month, compared with RM10 previously. (Envato Elements pic)
PETALING JAYA: The Malaysian Budget and Business Hotels Association has urged the Sabah government and Kota Kinabalu City Hall to immediately suspend a “sudden and exorbitant” increase in licensing fees imposed on hotels, warning that it could cripple the hospitality industry.
Its president, Sri Ganesh Michiel, described the move as unreasonable and unsustainable, saying it would force many budget hotels to shut down and hurt Sabah’s tourism sector.
“For decades, hotels in Kota Kinabalu have paid a fair licensing fee of RM10 per room per year, as set by the Cabinet in 1989.
“Now, with the reinstatement of outdated 1966 rates, hotels are being forced to pay between RM40 and RM140 per room per month, depending on classification and occupancy,” he said in a statement.
He said a 100-room hotel classified as a second-class hotel, with a 60% occupancy rate, would now have to pay RM57,600 annually in licensing fee, a staggering increase from the previous RM1,000.
“This is an unjustified financial burden on hotel operators, who are already struggling with rising operational costs,” he said.
Unfair advantage for short-term rental operators
Sri Ganesh criticised the lack of enforcement against unlicensed short-term rental accommodations (STRA), such as those operating through Airbnb and similar platforms.
“Hotels are subjected to strict regulations, licensing requirements, and taxes, while STRA operators remain largely unregulated and untaxed,” he said.
He also warned that if the issue was not addressed, it would have serious consequences for the state’s tourism industry.
“Investors will hesitate to enter the market if the business environment becomes hostile and unpredictable.
“Hotels play a crucial role in supporting tourism, and excessive fees will drive many out of business, leading to job losses and reduced affordable accommodation options for visitors,” he said. - FMT

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