Johor hotel rates to increase from 1 Mar due to rise in sales & service tax

Johor hotel rates expected to increase from 1 Mar after rise in taxes

From 1 Mar, visitors traveling to Johor can expect to fork out more for a stay in hotels, with rates set to spike.

The rise in hotel rates is a result of an increase in the sale and service tax (SST) from 6% to 8%.

Singaporeans reportedly make up the bulk of guests staying at these hotels.

Johor hotel rates set to increase

According to The Star, Malaysian Association of Hotels (MAH) Johor Chapter chairman Ivan Teo said its members had previously increased hotel room rates by 20% to 30% mid-year in 2023 following a rise in electricity tariffs.

“We want to focus on how to increase the occupancy rates for hotels especially in Johor Baru during weekdays and non-peak periods,” he said.

Mr Teo noted that hotels, with 90 three, four, and five-star establishments in Johor, experienced good occupancy on weekends, long public holidays, and school breaks.

As such, he did not expect any problems with the increase in room rates, especially when it came to guests from Singapore, China, Thailand, and Vietnam.

However, hotel operators might face an issue explaining the higher room rates to Indonesian guests in light of the unfavourable rupiah-ringgit exchange rate.

Singaporeans make up majority of hotel guests

Mr Teo stated that at present, Singaporeans are the majority of hotel guests who perceive room rates to be cheaper.

This is due to the favourable exchange rate.

The number of South Koreans staying in hotels in Johor Bahru and Iskandar Malaysia, he added, was also increasing.

This trend was due to an influx of golfers and visitors looking to escape their country’s winter.

“We have South Korean and mainland China guests who enrol in short-term English language courses and those seeking medical treatment at private hospitals here,” he said.

Authorities urged to attract tourists from other countries

Meanwhile, Lotus Desaru Resort chief executive officer R. Indra Ghandi said room rates would not increase but would include the SST from 1 Mar.

“We have been charging nett rates for our hotel rooms. Consumers are price sensitive so they will react if we were to increase our rates,” she said.

She added that she did not anticipate any issues with the inclusion of the SST. About half of the hotel’s guests were Singaporeans who had strong purchasing power.

Ms Indra also suggested for the government offer visa-free entry to tourists from countries other than China and India.

In addition, she hoped that Johor chief minister Onn Hafiz Ghazi would organise road shows to attract South Korean, Japanese, Taiwanese and Indian tourists.

“There are 300 million in India categorised as the middle-income group,” she said. “It is a huge market if we can attract them to visit Johor.”

Katerina Hotel Batu Pahat operations manager Mariam Mohd also shared that on the establishment’s end, room rates would see a minimal increase next month.

“We are finalising details and the increase is largely dependent on the packages,” Mariam said, adding that hotels in regions outside JB like Batu Pahat depended on guests visiting their hometowns and relatives.

Also read: More than 16 million foreign tourists visited Johor in 2023, majority of them Singaporeans

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Featured image adapted from Lifestyle Asia.