KUALA LUMPUR, 4 March 2025 – The Malaysian Association of Hotels (MAH) has urged lawmakers in Kota Kinabalu to reconsider the recent increase in hotel licensing fees, citing the severe financial burden it places on the hospitality industry. The reinstatement of the 1966 Hotel & Lodging Houses By-Laws has led to a sharp rise in operational costs for hotels across all categories, replacing the more affordable 1989 Cabinet Licensing Fees Structure. Previously, hotels were charged a flat rate of RM10 per room annually, but under the new system, they must now pay per occupied room per day, with rates varying by hotel classification.
Hafizan Wong, Chairman of the MAH Sabah/Labuan Chapter, expressed deep concerns over the impact of this policy, highlighting how the increased fees could force hotels to cut services, lay off employees, or, in the worst cases, shut down entirely. For example, a mid-sized Class 2 hotel with 100 rooms and a 60% occupancy rate would now face an annual licensing fee of RM57,600—an enormous leap from the previous RM1,000 per year.
MAH President Datin Christina Toh called for a fairer approach, emphasizing that while hotels are willing to contribute to the city’s development, they should not be disproportionately burdened while many unlicensed Short-Term Rental Accommodations (STRA) continue operating without proper oversight. She stressed that rather than imposing hefty fees on law-abiding hotels, the government should first regulate STRA operators to ensure a level playing field.
In response to the crisis, MAH has proposed a series of urgent measures, including suspending the new licensing fees until thorough discussions with industry stakeholders can take place, reviewing the fee structure to make it more sustainable, implementing regulations for STRA operators, and introducing transitional measures to help hotels adapt without suffering sudden financial strain. The association remains committed to engaging with authorities, conducting comparative studies on hotel licensing fees across Malaysia, and advocating for policies that balance economic growth with industry sustainability.
