Hotel and tourism industry representatives in Malaysia are urging the government to introduce tax relief measures, tighten regulations on short-term rentals, and provide greater support to manage rising operational costs ahead of Budget 2027. These calls come as the country intensifies efforts to boost inbound tourism and meet its target of 47 million international visitors under the extended Visit Malaysia campaign.
Datin Christina Toh, president of the Malaysian Association of Hotels (MAH), highlighted the need for a comprehensive review of the sales and service tax (SST) framework, electricity tariffs, and various fees imposed on hotel operators. She pointed to growing concerns over unfair competition from unregulated short-term rentals, which do not bear the same compliance expenses as licensed hotels. To address this, Toh urged online booking platforms to only list accommodations that meet established regulatory standards.
MAH also advocates reassessing fees charged by the Fire and Rescue Department, particularly those related to fire safety inspections and certification processes, which involve recurring costs for hotels. Rising electricity costs were another area of concern, prompting calls for a reevaluation of tariff categories and rates specific to the hospitality sector.
The association further proposed increased government grants and financial aid to support hotel digitalisation efforts, including automation, cybersecurity, and smart-hotel technologies. Funding for energy-efficient equipment, renewable energy projects, water conservation, waste management, and sustainability certification also featured prominently in their recommendations.
From the perspective of budget and business hotels, Malaysia Budget and Business Hotel Association (MyBHA) president Dr. Sri Ganesh Michiel recommended increasing the SST registration threshold for hotels from RM500,000 to RM1.5 million to better reflect the higher costs of doing business. He emphasized that gross revenue does not necessarily equate to profit, especially given escalating expenses in areas such as utilities, maintenance, wages, licences, insurance, and digital systems.
Dr. Ganesh also advocated for improved access to low-interest loans for renovations and upgrades, alongside rebates for solar panels and other energy- and water-saving equipment. Tax deductions for sustainability certifications and staff training were among other proposals. He stressed that tourism incentives should be directed only to registered and licensed accommodation providers, ensuring that benefits extend to local operators, employees, and communities.
In the cruise sector, Malaysia Cruise Industry Association deputy president Datuk Seri Koh Yock Heng called for enhanced incentives to attract international cruise lines to designate Malaysia as a home port. He argued that this arrangement would encourage tourists to fly into Malaysia, spend time in the country prior to their cruises, and depart from local ports, thereby benefiting airlines, hospitality outlets, transport services, and retail businesses.
Koh noted Singapore’s success in securing major cruise lines such as Disney Cruise Line and Royal Caribbean through competitive port charges, marketing support, and close collaboration with operators. He urged Malaysia to develop similar incentive packages, alongside improving direct international flight connectivity, digital marketing efforts, and tourism infrastructure.
Tourism Malaysia director-general Mohd Amirul Rizal Abdul Rahim stated that the agency is seeking a larger budget allocation for 2027 in line with the country’s goal of increasing international arrivals. Malaysia recorded 21.1 million foreign visitors during the first half of 2026, marking a 2.5% increase compared to the same period last year.