Sarawak hotel overheads up by 30% in two years, says hotelier

Sarawak hotel operators have experienced a 30% increase in overhead costs over the past two years, according to John Teo, chairman of the Malaysian Association of Hotels in Sarawak. Teo attributes this rise to higher labor, utility, food, material, and maintenance expenses. Rising material costs were particularly notable following the Covid-19 pandemic, while labor costs have continued to climb. Additionally, electricity and water expenses have surged as hotels replace older meters, as reported by the Borneo Post.

These escalating costs are squeezing profit margins and could lead to further surges in operational costs if the government endorses a proposal to raise the minimum wage to RM2,100 from its current level of RM1,700. Teo emphasized the importance of maintaining adequate staffing to ensure smooth operations and service quality, regardless of hotel occupancy levels.

Even during periods of fluctuating occupancy, essential functions such as housekeeping, equipment maintenance, and front-line services must continue uninterrupted.

Teo urged the government to consider the unique operating conditions of hotels of different sizes when developing support measures, as outlined in the upcoming 2027 federal budget, which is set to be presented on October 9. He advised against a one-size-fits-all approach and called for targeted assistance to bolster Sarawak's air connectivity.

This includes opening new regional and international routes, increasing flight frequencies, and potentially providing temporary promotional or operational support for routes with significant tourism potential.