Budget 2027: Hoteliers hope for better incentives, operating subsidies

Hoteliers are anticipating incentives and operating subsidies in the upcoming Budget 2027 to counteract the surge in operational costs. The Malaysian Association of Hotels (MAH) expressed the hope that more measures would be taken to alleviate the financial challenges faced by the industry. The rising costs stem from utility charges, local government fees, a shortage of workers, and an increase in marketing expenses.

Datuk Khoo Boo Lim, MAH vice-president, highlighted the need for higher TNB subsidies and reduced local government assessment fees on commercial properties.

John Teo, chapter chairman for Sarawak, reported a 30% increase in overheads over the past two years due to higher labour, utility, food, material, and maintenance costs. He pointed out that material costs skyrocketed post-pandemic while labour costs continued to rise, exacerbated by the need to replace older meters, which increased electricity and water expenses.

Teo emphasized that hotels must maintain adequate staffing to ensure operational smoothness and service quality despite fluctuating occupancy rates. He urged for fiscal support measures in the 2027 federal budget, considering the unique operating conditions of hotels of varying sizes. Additionally, Teo suggested strengthening Sarawak's air connectivity by introducing new regional and international routes and enhancing flight frequencies, advocating for collaboration with airlines to devise new routes and intensify promotional efforts.