PETALING JAYA: The Malaysia Budget & Business Hotel Association (MyBHA) anticipates that the upcoming 2025 national budget will deliver a lasting positive impact on the hotel industry, focusing on Small and Medium Enterprises (SMEs) ahead of Visit Malaysia Year 2026 (VMY 2026).
Dr Sri Ganesh Michiel, the national president, emphasised the importance of supporting small operators and SMEs offering tourism products, especially in smaller cities and districts.
“These operators play a crucial role in the tourism ecosystem by offering unique experiences that enrich Malaysia's cultural diversity," he said.
"By investing in tourism products and services in less-visited areas, the government can encourage more equitable economic growth and highlight Malaysia's diverse attractions.
"As we approach VMY 2026, it is crucial that the budget provides enough resources to prepare our hospitality sector for a surge in tourism.
"A well-planned budget will not only boost industry growth but also solidify Malaysia's status as a premier global tourist destination," he added in a statement on Sunday (Oct 13).
MyBHA also called for experienced officers to lead initiatives at the Tourism, Arts and Culture Ministry for VMY 2026.
“These officers should have extensive hospitality industry knowledge and maintain strong relationships with all stakeholders," he suggested.
"This leadership is vital for fostering collaboration, understanding industry needs, and effectively implementing strategies that benefit the tourism sector."
Additionally, MyBHA highlighted the urgent need to regulate Short-Term Rental Accommodations (STRA) by establishing regulations ensuring they meet the same standards as hotels in terms of laws, registration, licensing, safety, hygiene, and taxation.
Ganesh noted that "the unchecked growth of STRAs has created an uneven playing field, threatening the hospitality industry."
He mentioned the need "to regulate Online Travel Agencies (OTAs) due to concerns about unfair practices affecting hotel operators."
"Another critical recommendation is to adjust the Service Tax (SST) threshold, currently at RM500,000," he continued.
"This threshold places a significant tax burden on small and medium hotel operators.
"MyBHA suggests raising the threshold to RM1.5mil or an appropriate amount to ease financial pressure, enabling smaller operators to reinvest in their businesses and improve guest experiences," he added.
Other issues include addressing music royalties in the hospitality sector, where licensing complexities and high fees hinder hotels from providing entertainment.
MyBHA urged the government to simplify this process by establishing a single Collective Management Organisation (CMO) to consolidate royalty collection, thereby streamlining licensing, reducing administrative burdens, and ensuring fair, transparent fees.
"This approach will help hotels comply with regulations and offer quality entertainment without prohibitive costs."
Moreover, MyBHA called for budget allocation towards sustainable tourism practices to preserve Malaysia's natural and cultural resources, key tourist attractions.
The association stresses the importance of promptly addressing industry threats to prevent issues from escalating into major problems, as seen with the recent hotel check-in and check-out issue.
"Strict governance is essential to ensure concerns are addressed effectively, preventing minor issues from becoming significant problems," he concluded.
