KUALA LUMPUR: THE Malaysia Budget & Business Hotel Association (MyBHA) is hopeful that the upcoming 2025 national budget will provide a positive long-term impact on the hotel industry, especially in preparation for Visit Malaysia Year 2026 (VMY 2026).
"As we approach VMY 2026, it's imperative that the budget allocates sufficient resources to gear up our hospitality sector for an expected surge in tourism," said Dr Sri Ganesh Michiel, national president of MyBHA.
He said that it is crucial for industry operators to achieve sufficient profitability to reinvest in their services.
"By addressing these concerns and supporting small operators as well as small and medium enterprises (SMEs), we can ensure that tourists receive exceptional experiences across all regions of Malaysia, encouraging repeat visits and positive word-of-mouth," he said in a statement.
The association highlighted the importance of supporting small operators and SMEs, particularly in smaller cities and districts.
Michiel noted that these operators play a crucial role in the tourism ecosystem, providing unique experiences that enhance Malaysia's cultural richness.
"By investing in the development of tourism products and services in less-visited areas, the government can promote more equitable economic growth and showcase the diverse attractions Malaysia has to offer."
Michiel stressed the pressing need for regulation of short-term rental accommodations (STRA), highlighting that their unchecked growth has led to an uneven playing field and poses significant challenges to the hospitality industry.
MyBHA calls for swift action to introduce regulations that require STRAs to meet the same standards in areas such as legal compliance, registration, licensing, safety, hygiene, and taxation as hotels.
Michiel said this will help ensure fair competition and protect the interests of both consumers and legitimate accommodation providers.
The association is also pushing for regulations on online travel agencies (OTAs). While OTAs play a vital role in connecting travellers with accommodations, concerns are growing over unfair practices that may harm hotel operators.
Michiel emphasised that regulating OTAs would promote transparency, establish fair agreements, and protect both consumers and service providers from exploitative practices.
Another critical recommendation is the adjustment of the Service Tax threshold. Currently set at RM500,000.00, this threshold imposes a significant tax burden on small and medium-sized hotel operators.
"MyBHA proposes increasing the threshold to RM1.5 million an appropriate amount. This adjustment will alleviate financial pressures on smaller operators, allowing them to reinvest in their businesses, enhance guest experiences, and contribute more effectively to the tourism industry," Michiel said.
The association also stressed the importance of swiftly addressing all industry threats as soon as they are voiced.
Michiel said delays in resolving longstanding issues have led to complications that could tarnish the hospitality industry and the country's reputation.
He said that strict governance is needed to ensure that concerns are addressed promptly and effectively, preventing minor issues from escalating into major problems, such as referring to the recent hotel check-in and check-out issue.
In addition, MyBHA calls for the allocation of budget towards sustainable tourism practices.
The association recommends that the government invest in initiatives that promote eco-friendly operations, energy efficiency, and responsible tourism.
This includes providing incentives for hotels and tourism operators who implement sustainable practices, as well as funding for education and awareness programs that encourage both industry players and tourists to adopt environmentally friendly behaviours.
"By prioritising sustainability, Malaysia can ensure the long-term viability of its tourism industry and appeal to the growing number of ecoconscious travellers worldwide," Michiel said.
Meanwhile, he said that the issue of music royalties is also a significant concern for the hospitality sector.
Michiel said that complexities surrounding licensing and high fees have made it challenging for hotels to provide entertainment, which is essential for creating a pleasant environment for guests.
MyBHA urges the government to simplify the royalty collection process by establishing a single Collective Management Organization (CMO).
"Consolidating royalty collection into one agency would streamline licensing procedures, reduce administrative burdens, and ensure fair and transparent royalty fees. This approach enables hotels to comply more easily with regulations and offer quality entertainment without incurring prohibitive costs."