Tourism ministry to levy hotel guests from Sept 16

KUALA LUMPUR: The tourism and culture ministry plans to impose a tourism services fee (TSF) of between RM5 and RM30 per room, per night on anyone who stays at a hotel or serviced apartment — be it a foreign or local tourist — as a means to increase funds to promote Malaysia as a tourism destination.

The fee collection, which will come into effect on Sept 16, 2016, will be based on the star rating of the hotel and will be in addition to other fees/taxes levied such as those in Melaka, Penang and Langkawi.

Details remain sketchy but industry sources say hotels have to collect RM30 from their guests for each night’s stay at a five-star hotel, RM20 at a four-star hotel and RM10 at a three-star facility. The fee per night will be RM5 for a two-star, one-star and Orchid category.

When contacted by The Edge Financial Daily, a ministry spokesman said: “The minister, Datuk Seri Mohamed Nazri Abdul Aziz, will make the announcement at the appropriate time”.

It is understood that the ministry held a meeting on the TSF on Aug 30 to inform tourism players of this new fee.

This fee, sources were told, is to support Tourism Malaysia’s promotional and marketing activities. The ministry doesn’t want the private sector to depend too much on the government to promote tourism. Tourism Malaysia is the marketing arm of the tourism ministry.

The news caught many hotel operators and travel agents by surprise and they are seeking for more clarity on the matter.

“We would like the ministry to defer the implementation as there are still some technical issues to be handled. There are still many details to be ironed out,” a hotel operator said.

He also questioned why domestic tourists are being burdened.

“Will there be a maximum imposed if they are long-stay guests? What happens to corporate rates which have already been decided, and what about rooms that have already been sold before the implementation?” he highlighted.

Some raised the question of whether the fee will also be subject to the goods and services tax (GST), and if those using home-sharing services like Airbnb will also be asked to pay. Just last week, the government said Airbnb is considered legal as long as there is no foul play.

One suggestion made by a hotel operator is to standardise and impose a flat fee on all accommodations, regardless of its star rating. “For the sake of tourists and to avoid confusion, why not impose a single rate no matter where they stay?” he suggested.

Melaka and Penang also impose a fee on guests staying in hotels in the two states. In Penang, fees paid also vary according to the type of hotel guests stay in, with RM3 charged 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 guest houses.

In Melaka, the state government charges a RM2 heritage tax per room, per night, on all guests, regardless of the type of hotel, and is collected at check-in.

Just two months ago, Langkawi too started imposing what it termed “tourism promotion fees” of RM1 per room, per night on those checking into one- and two-star hotels, RM3 for three- and four-star hotels, RM5 for five-star hotels, RM7 for six-star ones, and RM9 for seven-star hotels.

Dewan Bandaraya Kuala Lumpur has also proposed a surcharge on hotels, at an amount to be fixed, to be collected from tourists, to help with tourism promotion. This fee is set to come into force next year.

Interestingly, Putrajaya’s plan to impose the TSF comes just as tourist numbers to Malaysia grow again. Just last week, it was reported that tourist arrivals between January and June this year grew 3.7% year-on-year to 13.03 million from 12.57 million.

China tourist arrivals jumped a whopping 32.1% from the corresponding period last year to levels not seen since before the twin airline tragedies that hit Malaysia in 2014.

However, the move may not be viewed too kindly by Malaysians, who have just come to terms with the imposition of the GST in April last year.

-TheEdge.