In light of the persistent depreciation of the Malaysian Ringgit (MYR), it is imperative for the government to take proactive measures to bolster the national economy's stability. This can be achieved through robust promotion of tourism and export trade, particularly amidst challenging economic conditions.

According to recent statements issued by the Malaysian Hotel Association (MAH) and the Malaysian Budget & Business Hotel Association (MyBHA), the government's increase in the Sales and Services Tax (SST) to 8%, rising electricity and water charges, increasing operating costs, and the upcoming implementation of the electronic invoice policy will lead to a 30% to 40% increase in hotel room rates.

Adding to the current challenges are recent security incidents that have garnered international attention, such as the shootings at Kuala Lumpur International Airport and in the waters off Kunak, Sabah, along with frequent incidents of car window smashing and robberies. These events are likely to significantly undermine the confidence by both domestic and international tourists in visiting Malaysia, thereby exacerbating the already struggling domestic tourism industry.

Tourism stands as one of the main pillars of the Malaysian economy. Amidst the ongoing depreciation of the MYR, Malaysia's tourism sector holds inherent competitive advantages and allure. However, the rising hotel prices and frequent security incidents have significantly affected the industry.

Tourists may choose to forgo visiting Malaysia due to increased travel costs or personal safety concerns. They may also compare Malaysia to other neighbouring countries and decide not to visit due to higher travel costs.

We call upon the government to urgently address the ramifications of the recent surge in security concerns. While actively promoting Malaysia's tourist attractions, it should consider offering tax incentives and financial assistance to the hotel industry, aiding them through this challenging phase. Such measures would indirectly bolster the competitiveness of Malaysia's tourism sector.

Dr Pamela Yong
MCA Deputy Secretary General

16 April 2024

-MCA Comm-