BUDGET hotels are raising their room rates by up to 60% following high overhead costs, said industry players.

They said business operations are more expensive now due to the labour shortage and recent implementation of the RM1,500 minimum wage.

Malaysia Budget & Business Hotel Association (MyBHA) president Emmy Suraya Hussein said the increase in electricity rates also leads to the increase in room rates.

“Our members are adjusting their room rates by 50% to 60%,” she told The Malaysian Insight.

This is already happening in a few states, she added.

“The hotel industry is still recovering, but everything (including hikes in costs) came at the same time and affected our operational cost.”

Johor MyBHA chairman Jarod Chia said service suppliers have also raised their prices.

“Launderettes have increased their rates by 15%, while the new minimum wage has increased our salary bill by 25%.

“As such, our overall costs have gone up by 35%.

“As the industry has yet to fully recover, we cannot raise our rates too much.

“The new room rates will be effective from June 1.”

Although hoteliers are seeing more business after borders were fully reopened, they lack cleaners, he added.

“We are just getting back on our feet, but everything costs so much more now.

“We have asked the government to suspend the implementation of the RM1,500 minimum wage for six months.”

Chia said small- and medium-sized hotels will struggle to compete with larger hotels and homestays.

“Big hotels pay higher salaries and do not have such a severe labour shortage.

“Many tourists also choose to stay at homestays, making it hard for small- and medium-sized hotels to survive.”

Occupancy rates are low on weekdays, forcing hotels to control overhead costs or risk closing down, he added.

“If anyone is willing to buy our businesses, we are willing to sell.”

Penang MyBHA chairman Lim Mee Lee said Penang hotel room rates are higher on weekends and public holidays.

“This is because there are more tourists during this period, so the rates are slightly higher.”

During the pandemic, most hotels in the state slashed their prices to attract guests, he added. – June 4, 2022.