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

The cost of running hotels in Sarawak has jumped by 30% over the past two years, according to a hotelier who chairs the Malaysian Association of Hotels Sarawak. John Teo attributes the rise to higher expenses in labor, utilities, food, materials, and maintenance. He noted that material costs surged after the Covid-19 pandemic, while labor costs kept climbing. Additionally, electricity and water bills have gone up as hotels replace older meters, according to the Borneo Post.

These escalating costs are squeezing profit margins. Teo warns that if the government agrees to raise the minimum wage to RM2,100 from the current RM1,700, operational costs could climb further. To maintain smooth operations and service quality, hotels must keep enough staff on hand, even when occupancy varies. "Even when occupancy fluctuates, essential functions such as housekeeping, equipment maintenance and basic front-line services still need to be carried out continuously," Teo emphasized.

The hotelier is urging the government to provide targeted support that considers the unique challenges faced by hotels of different sizes. The 2027 federal budget, set to be presented on October 9, will be a key opportunity for such measures. Teo advises against a one-size-fits-all approach and calls for increased air connectivity in Sarawak.

He suggests opening new regional and international routes and boosting flight frequencies. The government should collaborate with airlines to chart these new routes and consider temporary promotional or operational support for routes with strong tourism potential.