Suspend Hotel Licensing Fees In Kk Urges Mah

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Hotels in Kota Kinabalu now have to pay licensing fees per occupied room each month as opposed to the previous annual rate.
PETALING JAYA: The Malaysian Association of Hotels (MAH) is the latest group to urge the Sabah state government and the Kota Kinabalu City Hall (DBKK) to suspend the implementation of hotel licensing rates based on a 1966 by-law as they have significantly raised operational costs.
In a statement, MAH said the 1966 Hotel & Lodging Houses By-Law – which has been reintroduced since Jan 1 – poses a severe financial strain on hotels in the Sabah capital and may force them to reduce services, lay off staff, or, in extreme cases, cease operations.
MAH Sabah/Labuan chapter chairman Hafizan Wong explained that hotel operators were previously required to pay a licensing fee of only RM10 per room per annum under the 1989 Cabinet Licensing Fees Structure.
Under the new fee structure, they now have to pay rates per occupied room each month, based on DBKK’s hotel classification category of first, second and third class.
He said that a 100-room hotel classified as a second class hotel would now have to pay RM4,800 per month compared to the previous RM1,000 annual fee, which was a “steep increase in costs”.
“To offset rising costs, hotels may have no choice but to increase prices, making local stays less attractive for both domestic and international tourists,” said Hafizan.
MAH warned that the increased cost could have a knock-on effect on local businesses, ranging from food and beverage outlets to transport services.
The group was also concerned that guests might wrongly blame hotels for price increases, which it said would further erode trust in the industry – especially with Malaysians increasingly opting for cheaper holidays in neighbouring countries.
Apart from calling for the fee to be suspended until a transparent consultation with industry stakeholders can take place, MAH also said the its structure should be reviewed to create a fair, sustainable model that supports both tourism growth and hotel operations.
MAH stressed that clear regulations for short-term rental accommodations (STRA) operators were needed to ensure a level playing field across the accommodation sector.
It said the current fee hike disproportionately affects licensed hotels that already adhere to strict regulations, taxes, and operational costs, while many unlicensed STRA operators remained unchecked.
“The playing field remains unbalanced — and it is unjust to impose these sudden, exorbitant fees without first addressing the gaps in STRA regulation,” said MAH president Christina Toh.
“We are not just against the fees increasing. We understand the need to contribute to ensure the city’s prosperity, but this must be done fairly.
“Law-abiding hotels should not bear the financial weight alone while others continue to operate without proper licensing and financial contributions.”
Yesterday, the Malaysia Budget and Business Hotel Association urged the Sabah government and DBKK to immediately suspend the “sudden and exorbitant” increase in licensing fees, 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. - FMT

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