JOHOR BARU: There were mixed reactions among Johor-based hoteliers on the increase in service tax which takes effect today.
While some of them took proactive steps by informing guests in advance, they feel it will affect domestic tourists, due to low value of the ringgit and rise in cost of living.
Malaysian Association of Hotels (MAH) Johor chapter chairman Ivan Teo foresees a drop in local clientele bookings as the room rates rise.
He said it's important for the government to first regulate accommodation services such as Airbnb as the increase in room prices due to the higher service tax will 'push' local tourists towards cheaper lodgings.
He said the main issue faced by Johor-based hotel operators was a shortage in manpower, especially for house-keeping staff such as cleaners, maintenance worker, laundry, and workers in technician units.
"A huge number of hoteliers in Johor are losing their staff who opt to work in Singapore due to the Singapore dollar's lucrative exchange rate against the ringgit.
"Local clients or domestic visitors especially those with families are choosing Airbnb accommodation because its cheaper and they have the option to rent a whole apartment.
"Airbnb operators are not subjected to service tax, and this may translate into lost revenue for the government," Teo said, adding Airbnb operators do not deal with licensing issues, thus enabling them to minimise their overhead operational cost.
On the flipside, Teo said the service tax increase from six to eight per cent does not affect their foreign clientele, who are mainly from Singapore.
He said the republic had recently increased their taxes too, thus Johor, is still a favourite holiday destination for Singaporeans.
Meanwhile, Renaissance Johor Baru Hotel marketing and communication head, Hezrin Ali said the etablishment had informed their guests about the hike in service tax a month ago.
"Our guests were notified via pre-arrival emails of the increment, and we also reached out to our guests on our database, about a month ago, to inform them about it."
He said when it came to the hotel, which is part of Marriott International luxury & lifestyle hotel chain, there was no confusion about the new service tax.
"The room charges were increased by eight per cent, while a six per cent service tax is applied to our food and beverages invoices."
He also said the upcoming Ramadan buffet, which was previously priced at RM188 per pax, will be increased by RM10.
Offering a different view was Ponderosa Golf & Country Resort Marketing Communications Consultant Yvonne Loh, who said there had been slight confusion on the tax hike.
She said there were different set of instructions provided by the Royal Malaysian Customs Department and other agencies.
When explaining this, she said some of the department's officers informed hoteliers that an eight per cent service tax increment would cover all services and products provided by hotels, while other officers had claimed that the six per cent was on food and beverages only.
She said the department should have briefed their officers so that a uniformed directive would have been disseminated to all hoteliers nationwide.
"It is too earlier to gauge if the surge in room prices would affect their guests' bookings yet as SST was just implemented today."
She said hotel operators in Johor, usually operate below its capacity on weekdays, while weekends and public holidays will see more visitors namely from Singapore.
Johor Tourist Association chairman Jimmy Leong said the service tax increment was necessary as it would contribute to the sector's sustainability.
However, he also highlighted the fact that hoteliers have yet to recuperate from the losses they incurred since the Covid-19 pandemic.
He said in this regard, the increased tax would not translate to profits to hoteliers right now.