“Hike in room rates?” – M’sian Hotel Operators Say New RM1.7k Minimum Wage Worsens Operational Costs

The Malaysian Association of Hotels (MAH) has expressed concerns about the recently tabled Budget 2025’s impact on Malaysia’s tourism and hospitality sector, including the increase of the minimum wage from RM1,500 to RM1,700 which it deemed would add additional strain on hoteliers’ financial resources. 

In a statement, the association expressed appreciation for the RM550 million allocation for the ASEAN Tourism Forum (ATF) 2025 and Visit Malaysia Year 2026, as well as the RM110 million allocation for ecotourism but urged for careful channelling and funding to ensure that the hospitality and tourism sectors can maximise the benefits.

MAH is concerned about Budget 2025 and its impact on the tourism and hospitality sector

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However, MAH said that it’s concerned about the overall budget allocations, saying that while the approximately 29% year-on-year increase is commendable, it falls short of the substantial investments needed to address the current challenges faced by the tourism and hospitality industry.

MAH stressed that the absence of targeted tax incentives is particularly concerning as hoteliers had hoped for measures to alleviate the pressing operational costs they face daily.

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The statement added that MAH’s wish for “green and sustainable” practices remains unaddressed, even as the government has set ambitious goals through the National Tourism Policy to achieve a sustainable tourism industry by 2030, which would make it challenging for the industry to achieve the goals.

Furthermore, MAH also calls for transparency in the collection and utilisation of the Tourism Tax, saying that since its implementation in 2017, hotels have been tasked with collecting this tax from foreign guests and remitting it to the Royal Malaysian Customs Department (RMCD).

MAH says the new minimum wage will further increase hoteliers’ operational costs

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As for the increase of the minimum wage to RM1,700 starting February 2025, MAH asserted that it will “further exacerbate operational costs” and “impact overtime rates during weekends, public holidays and peak hours”.

The association believes that the new RM1,700 minimum wage adds additional strain on hoteliers’ financial resources. 

This may allude to hotel operators having to increase room rates and other fees to offset the increased operational costs.

Accordingly, MAH president Datin Christina Toh urged the Government to consider additional support mechanisms to empower the hospitality sector so that a resilient tourism economy can be achieved.

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So, what do you guys think of MAH’s statement? Share your thoughts with us in the comments.

Also read: Kindergarten, Nursery Fees Across M’sia to Rise Up to 25% Next Year Due to Budget 2025’s Minimum Wage Increase