KUALA LUMPUR, Feb 13 — Hotel prices in Malaysia are expected to rise between 10 per cent and 30 per cent due to the recent increment in the Sales and Services Tax (SST) to 8 per cent, effective from March.

Sinar Harian quoted Malaysian Hotel Association (MAH) president Datin Christina Toh saying that despite this, Malaysia boasts some of the lowest hotel room rates in the Southeast Asian region.

"In terms of prices within the Asean countries, Malaysia is among those with the lowest hotel room rates in the market.

"For instance, in Laos, we have to pay US$130, equivalent to RM619, for a five-star hotel room, while for a four-star hotel room, it’s US$100, approximately RM476. When compared to our country, it is still more affordable,” she was quoted as saying.

Toh also said that besides the SST, peak season factors such as school holidays or celebrations could also contribute to the price hike.

Following Prime Minister Datuk Seri Anwar Ibrahim’s announcement in October last year to raise the SST rate from 6 per cent to 8 per cent, excluding certain services, Christina assured that the price hike would not hinder hotel bookings.

She said this is due to the upcoming promotions to attract visitors and emphasised government support, including visa-free entry for tourists from China, India, and other Asean countries.

Also weighing on the same matter, the Malaysia Budget & Business Hotel Association (MyBHA) national president Ganesh Michiel said hotel prices are expected to soar by up to 50 per cent due to the cascading effects of the new SST rate on the entire supply chain of the industry.

He said that the SST rate has an impact on the costs of cleaning services, electricity, water, and transportation, and hotel operators are compelled to raise prices to ensure their operations remain unaffected, thereby ensuring the long-term sustainability of their businesses.

"The price increase is a result of actions that escalate operational costs, such as tax hikes. For example, suppliers providing products to hotels are also affected by the SST increase.

"Similarly, laundry services, if they pay SST, are undoubtedly compelled to raise the costs of washing towels, bed sheets, pillowcases, and hotel blankets,” he was quoted as saying by the news outlet.

Last year while tabling Budget 2024, Anwar said Putrajaya will also expand the scope of taxable services to include brokerage, underwriting and karaoke,