MALAYSIA Budget and Business Hotel Association (MyBHA) are calling for the government to increase the annual threshold of Sales and Service Tax (SST) for the Hospitality Industry from RM500,000 to RM1,500,000.
Its national president Dr Sri Ganesh Michiel said until today, no review has been made and the threshold value and rate that has been previously set was outdated and has not been in line with the prices and income in the current economy.
“We seek justice in this matter so that we can set the appropriate rate for hotel guests, especially in helping the B40 (bottom 40%) group,” Ganesh wrote in MyBHA’s letter to Prime Minister Datuk Seri Anwar Ibrahim.
Describing misconduct by illegal businesses as a form of technology colonisation of the hotel industry, Ganesh requested the government to immediately enforce the guidelines for short-term rental accommodation (STRA), which is long overdue.
Adding to the list of struggles the hotel industry has been facing over the years, he said hotel entrepreneurs and industry players are experiencing losses or low income, mainly due to offers and promotions that have been set by illegal online travel agencies (OTAs).
He pointed out that reasonable income and profits will help hoteliers provide good hospitality and tourism services, as well as assist the government in collecting higher taxes.
This to ensure that the above situations can be controlled and addressed, as well as appropriate action taken to preserve the hotel and tourism industry.
Next, Ganesh suggested re-establishing the matching grant by the Finance Ministry (MoF) for the tourism sector for the purpose of repairing the budget hotels (2 stars and below) as per the tourism budget previously.
“Hopefully the government could facilitate and ensure the procedure and process of applying for the grant to run smoothly, thus encouraging more hoteliers to apply for it.
“Also extend the benefit of the grant, allowing them to purchase or replace linens (towels, blanket, pillowcase) for their hotels,” he explained.
This is intended to encourage more hoteliers to repair and upgrade their hotel facilities in order to serve the guests better.
MyBHA also called for the government to prepare a special budget to re-train workers and re-establish skilled workers in the tourism and hospitality industry.
“The attitude and appearance of the frontliners in the industry will leave an impression on the guests and tourists, hence, if they fail to achieve a certain standard, it will give a negative image to the country,” Ganesh said.
It is crucial as well for the government to revise the electricity tariff imposed across the country, where Ganesh suggested in setting a special tariff to assist the tourism and hospitality operators, who have been affected by other industry threats.
The association also said the government could introduce a special tax incentive for domestic tourists. This is intended to mobilise or encourage people to travel within the country in revitalising the industry.
On strategies and investments, this sector needs to revitalise tourism, Malaysian Association of Tour and Travel Agents (Matta) president Nigel Wong told The Malaysian Reserve (TMR) that mobility and accessibility is going to be the defining factor in growing the tourism sector, and investment is heavily needed in developing the transportation infrastructure.
“High-speed rail (HSR) networks are crucial for moving large numbers of people cross-country; I am of course referring to the HSR originally planned from Singapore through to Thailand, as well as from West to East Peninsular Malaysia,” Wong said.
He added that the government should also look at upgrading the existing airport infrastructure nationwide and encouraging transit passengers to convert them into staying tourists.
Moreover, due to the country’s strategic location in South-East Asia, he advised looking at incentivising cruise lines to home port in Malaysia, as well as planning to build and develop more ports in various parts of the country to serve this high-growth segment.
The tourism industry globally has seen a steady recovery, quicker than what was originally forecasted and has reached, according to data from the United Nations World Tourism Organization (UNWTO), 80% of pre-pandemic levels.
However, new global challenges, rising costs and a rapidly changing tourism landscape means that tourism stakeholders will need to be flexible and nimble.
“As can be seen in Malaysia, healthy domestic tourism will be a key factor in cushioning local industries from external factors that can drastically affect inbound tourism in a very short span of time — agents need to diversify their product offerings and not rely too heavily on one market,” Wong told TMR.
From East Malaysia’s perspective, Sarawak should be given a bigger allocation in Budget 2024 for the development of infrastructures throughout the state, said its Deputy Minister of the Ministry of Tourism, Creative Industry and Performing Arts Datuk Snowdan Lawan in a recent statement.
He said the funding is vital to empower the state to catch up the infrastructure works given the vast size of its land.
“Being the partner of the Malaysia Agreement MA63 of course we expect more budget from the federal government to assist us throughout the state because as you know, Sarawak is a huge state, therefore, we need equally large funds, especially in the infrastructure works,” he told the press.
Snowdan added that the national budget should also allocate specific funds for the state’s Tourism Ministry, as well as more assistance from the Ministry of Tourism, Arts and Culture (Motac) to help promote tourism events in the Land of Hornbill.
Meanwhile, Airbnb public policy head for South-East Asia, India, Hong Kong and Taiwan Mich Goh commented that Airbnb applauds the government’s Madani Economy Framework for fostering sustainable economic growth and resilience through targeted measures.
“We believe that this provides a strong foundation for tourism promotion, further enhancing Malaysia’s appeal among international travellers ahead of Visit Malaysia Year 2026,” she said in a statement.
According to the Department of Statistics Malaysia (DoSM), tourism remained one of the pillars of the economy, accounting for 14% of Malaysia’s GDP in 2022.
Additionally, Airbnb has grown to become a key player of Malaysia’s tourism ecosystem and according to a report conducted by Oxford Economics, commissioned by Airbnb, the platform contributed over RM5 billion to Malaysian GDP and supported almost 57,000 jobs in 2022.
This accounted for approximately 4.9% of the tourism industry’s contribution to GDP in 2022.
This contribution to both the economy and jobs is driven by travel in the country, creating powerful economic ripple effects that support businesses such as retailers, restaurants, bars and cafes — which are often the foundation for life in local communities — and has generated jobs that go far beyond where travellers stayed and with whom.
A survey by ClearPath Strategies revealed that over 82% of Malaysians polled said Airbnb not only drives economic activity, but also allows locals to generate additional income.
Airbnb said it will advance its strategic partnership with the Malaysia Digital Economy Corp (MDEC) to establish Malaysia as a preferred digital nomad hub in the region.
Ahead of the Budget 2024 announcement on Oct 13, Airbnb has shared several proposals for the government’s consideration, including recognising the potential of the sharing economy in the hospitality sector.
Furthermore, STRAs are set to play an important role as travel continues to rebound.
In the latest Clearpath Strategies survey (conducted from Feb 8 to March 2), 60% of Malaysians polled said they are likely to travel with Airbnb in the next 12 months while 40% are likely to host on the platform in the same period.
To ensure that all tourism accommodation players can benefit from government incentives, Airbnb calls for several key incentives — currently dedicated only to traditional players in the tourism sector — to be extended to STRA hosts (both individuals and small and medium enterprises [SMEs]).
Lastly, the company encourages the government to leverage STRA activities as an additional income generator and set up special initiatives in partnership with participating financial institutions.
These initiatives could offer low-interest financing schemes to support young Malaysians in purchasing their first property.
Source: https://themalaysianreserve.com/2023/10/04/tourism-players-want-budget-2024-to-increase-sst-combat-illegal-operators/