Impose rules on short-term residential accommodation, say budget hotels

 

Hotel owners say those who provide short-term residential accommodation should be subject to the same rules as them.

PETALING JAYA: A budget hotel association wants the government to implement regulations for short-term residential accommodation (STRA), which is eating into its members’ business.

The Malaysian Budget and Business Hotels Association (MyBHA) said the guidelines, which cover licensing and tax leakages among others, are ready but have yet to be implemented.

The association has 2,700 members.

“Until now, they have not been presented in Parliament,” MyBHA president Sri Ganesh Michiel told FMT.

“There have been many engagement sessions and briefings with the industry resulting in the guidelines being drawn up. They promised to enforce them but nothing has been done.”

He said the government has been made aware of the struggles the industry is facing, and should not “just make promises and leave it at that”.

While demand for hotel rooms has been picking up, it has not fully recovered because of the availability of short-term residential accommodation, and on-line tourism agencies which are not regulated by law.

Ganesh claimed the budget hotels’ profits have plunged by 45% to 70% because the STRA guidelines have not been enforced.

“STRA and on-line travel agencies that are unregulated are offering unlicensed rooms at low prices, making budget hotels a last choice among tourists,” he said.

The moment a room is advertised on an online booking website, the rates start dropping due to competition among the online platforms, which is detrimental to the budget hotel owners.

“How are we supposed to do business with such low prices?” he asked. “If one room is RM50, how are we supposed to survive? There is no profit to be made especially now with the higher wages and bank interest rates.

“Just because a hotel is full doesn’t mean it is profitable. We need help.”

The chairman of the Malaysian Hotels Association Penang division, Tony Goh, said they are still waiting for the state and federal governments to implement the guidelines for STRA.

While domestic demand for hotel rooms is increasing, he said, the demand for Airbnb and similar accommodation is also rising.

MAH has 95 members with 15,300 hotel rooms, and facing a worker shortage.

Goh hoped the government will give special attention, support and incentives to help lower their overheads which have “increased drastically” because of the amendment to the Employment Act 1955, electricity costs and inflation.

He was referring to the reduced weekly working hours from 48 to 45, and overtime payment for employees earning less than RM4,000.

The hospitality industry has been urging the government to impose stricter STRA regulations since 2018.

Industry players feel STRA operators should be subject to the same taxation rules as hotels because their businesses also offer accommodation. - FMT