Budget hotels are seeking temporary exemption from the RM1,500 minimum wage rule until all factors threatening the industry are solved

PETALING JAYA:   Budget hotels are seeking temporary exemption from the RM1,500 minimum wage rule until all factors threatening the industry are solved.

 

Malaysia Budget & Business Hotel Association (MyBHA) deputy president Sri Ganesh Michiel said the government needed to help address six key threats the industry faced to ensure its long-term viability. He also pointed out that the current Budget hotel room charges between 80 and 200 Ringgit, but if the government still insists that hotels implementing the minimum wage system, and it cannot rule out that the price of Budget hotel room will be increased by 60 to 70%. 

“Failure to resolve the threats and even increasing the burden of operating costs of the hotel industry will prompt hotel and tourism operators to raise the selling price for hotel or tourism services,”

 

MyBHA said the hotel and tourism industry is facing the following challenges:

• Income reduction resulting in inability to cover operating costs;

• Hotel operators have to reduce the number of employees which will directly affect service quality;

• Hotel operators have to reduce salaries for executive employees or terminate their services in order to obtain sufficient cash flow for the continuity of their business;

• Hotel operators have to reduce overtime hours for their employees;

• Hotel operators are unable to improve hotel services such as buying new linens and towels as well as ensuring a better level of cleanliness;

• Hotel operators are unable to raise room sales prices due to the issue of unhealthy competition with online travel agencies (OTA); and

• Many Tourists choose to stay in short-term residential accommodation (STRA) even if it is an illegal or unlicensed accommodation provider.

•

Given that many of the industry recovery threats have remain unresolved, Sri Ganesh said the sudden enforcement of the new minimum wage rate would mean additional burden to hoteliers in the form of increased business operating costs whereby service fee rates from suppliers will go up, hence they “could end up closing their business operations”.