6-11-2023 (KUALA LUMPUR) Travellers may consider alternative accommodations or destinations as hotel room prices in Malaysia are projected to increase next year, according to a report by the Malaysian Association of Hotels (MAH). The anticipated price hike of up to 30% is attributed to the forthcoming increase in the Sales and Services Tax (SST). While this development may prompt some Singaporeans to explore options such as Airbnb or choose other countries for vacation, experts believe that the impact on international tourism will be minimal.
Singaporeans interviewed by CNA expressed their concerns about the rising hotel prices in Malaysia. Hanisah Halid, a frequent visitor to Johor Bahru, cited the appeal of lower hotel rates compared to Singapore and mentioned the possibility of opting for day trips instead of overnight stays if prices increase significantly. A search conducted by CNA indicated that high-end hotels in Johor Bahru generally cost between S$90 and S$157 per night for a standard room, while similar accommodations in Singapore are priced between S$300 and S$800.
Some travellers, like preschool teacher Adriana, mentioned considering Airbnb or exploring other countries for longer vacations in response to the potential price increase. However, shorter trips and grocery shopping in Malaysia remain appealing due to the favourable exchange rate. Farizul Ikhmal, a Malaysian domestic traveller, suggested travelling in groups to split the costs or exploring neighbouring countries with more budget-friendly options if hotel prices in Malaysia become unaffordable.
Despite the projected price hike, housewife Faridah Beram remains undeterred, stating that the stable Singapore currency allows her to afford vacations in Malaysia. She praised Malaysia for its undiscovered attractions, food, culture, and alignment with her preferences. Faridah often stays in hotels in Johor Bahru to avoid the hassle at the border crossing and appreciates the convenience and quality of the accommodations.
Tour company Chan Brothers Travel expects the demand for its Malaysia tour packages to remain strong, citing Singaporeans’ significant spending power in Malaysia and the stable or rising exchange rate. The company’s extensive network of partners, including hoteliers, provides opportunities to collaborate and meet customers’ needs. The Malaysian ringgit’s weakening against other currencies in the region may make hotel prices more affordable for international tourists, limiting the impact on international tourism.
Experts expressed doubts that the SST increase alone is responsible for the projected 30% increase in hotel room prices. Factors such as increased manpower and utility costs could also contribute to the higher prices. Shortages of tourism industry manpower during the pandemic necessitated higher wages to attract workers to the hotel sector, while utility costs rose rapidly post-pandemic. Despite the potential impact of the SST, the experts questioned whether a 30% price increase would be justified and suggested other sources of inflation, such as the depreciated ringgit.
Although the rise in hotel room prices may affect domestic tourism more than international tourism, Malaysia remains an attractive destination for international tourists due to the affordability compared to their home countries. The weakened ringgit is expected to encourage short escapes to Malaysia, particularly among Singaporeans. Additionally, the experts anticipate a flourishing domestic tourism sector driven by the cultural and geographic diversity within Malaysia, leading to increased investor confidence in developing resorts and visitor attractions.
While the projected increase in hotel room prices in Malaysia may prompt some travellers to explore alternative options or destinations, the impact on international tourism is expected to be limited. The affordability of Malaysia’s accommodations, coupled with the weakened ringgit, will likely continue to attract both domestic and international visitors.
