Malaysia hotel rates are expected to rise by up to 30% from March 1st, following the increase in the sales and service tax (SST) from 6% to 8%.

While hoteliers predict the price hike, industry insiders believe it won’t significantly impact international tourism.

The Malaysian government implemented the SST increase in October 2023, aiming to boost the economy. As a result, hotel operators anticipate raising room rates by 10% to 30%, according to Malay Mail.

However, industry leaders downplay concerns of a tourism decline.

Malaysian Hotel Association president, Datin Christina Toh, highlights the country’s already competitive hotel rates in Southeast Asia, stating the price increase won’t deter tourists.Datuk Tan Kok Liang, president of the Malaysian Tourism Federation, echoes similar sentiments. He emphasizes the favorable exchange rate and visa-free policies attracting international tourists from key markets.

While acknowledging potential impact on domestic tourism, Tan hopes hotels will offer alternative pricing options for local travelers.

Malaysia’s proactive tourism initiatives, including visa waivers for Indian and Chinese tourists, contributed to the country surpassing Thailand as the most popular tourist destination in Southeast Asia in 2023, with nearly 29 million foreign arrivals, according to Focus Malaysia.