Hotel Prices Expected To Increase Up To 30% Due To SST Hike This Year

The Sales and Service Tax (SST) rate will be raised from 6% to 8% on 1 March.

Cover image via katemangostar/Freepik & Malaysian Association of Hotels

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Malaysians and tourists can expect to pay more for hotel stays once the new Sales and Service Tax (SST) rate comes into effect in March

According to Malay Mail, Malaysian Association of Hotels president Datin Christina Toh said hotel prices are expected to increase by 10% to 30%, following the SST rate rise from 6% to 8% on 1 March.

Nevertheless, Toh remains optimistic about tourism, citing ongoing promotions and government support, such as visa exemptions for tourists from specific countries.

She added that, despite the price hike, Malaysia still has one of the lowest hotel room rates among the ASEAN countries.

"The increase has no effect. That is one of the reasons why we want to attract more foreign tourists to our country because our prices are still reasonable," she said.

Malaysian Association of Hotels president Datin Christina Toh.

Image via Malaysian Association of Hotels

Malaysia Budget and Business Hotel Association president Dr Sri Ganesh Michiel expects hotel prices to soar up to 50%

He stressed the domino effect of the new SST rate on the entire hotel supply chain, impacting costs of cleaning services, utilities, and transportation.

To ensure business sustainability, hotel owners may be forced to raise prices, he said.

Image for illustration purposes only.

Image via katemangostar/Freepik

Meanwhile, a local hotel owner said they definitely plan to raise room prices due to increased charges imposed by suppliers

Ridel Boutique Hotel owner Aiman Wasa told Sinar Daily that suppliers have started to send notices of raised prices by up to 20% starting 1 March.

"Room prices must go up. If suppliers raise prices, we also must do the same; this does not include an increase in water tariff rates.

"Competition in this business is very high, but we cannot raise prices too high.

"That is one of the reasons why many hotel businesses are closed.

"When prices go up, there are no customers, and when prices are not raised, costs go up," he said.

Malaysians can also expect to pay more for online services starting March:

Prime Minister Datuk Seri Anwar Ibrahim announced the SST increase during the tabling of Budget 2024 last year:

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