Penang implements a bed tax

All hotel guests in Penang can expect to pay a bed tax from June 1, the proceeds of which will be used for tourism development and promotion including, some believe, the funding of a new Penang convention and exhibition bureau.

Hotels were informed on March 5 that the tax, called Local Government Fee, will cost RM3 (US$0.93) per room per night for four- and five-star hotels, and RM2 per room per night for three-star hotels and below, including dormitories, budget hotels, hostels and guesthouses.

The fee will be imposed on guests staying in hotels from June 1 regardless of whether bookings and payments were made and received before the implementation date.

Hotel operators are to collect the fee and hand it over to the Municipal Council of Penang at the end of every two months. The fee will be channelled into a special trust account established by the state government under the control of the state finance department. A special committee chaired by Penang's chief minister and including hotel representatives will decide how the proceeds will be spent.

Andy Teh, group director of sales and marketing of Eastern & Oriental Hotel Penang, said: “This is good for the destination if the fund is wisely spent and if the tourism board is mature enough to understand the macro role it has to play.”

The tax comes as Penang undergoes a “reinvention” in the arts and heritage, and in the MICE sector where two new convention centres, the Subterranean Penang International Convention & Exhibition Centre and the Penang Waterfront Convention Centre will open in 2015 and 2017 respectively.

“With the new venues, it is the right time for Penang to have a convention bureau,” said Ho Yoke Ping, general manager-sales & marketing of Malaysia Convention & Exhibition Bureau. The state's tourism bureau, Penang Global Tourism, is overseeing the setting up of the convention bureau.

-TTG Asia.