No plans to raise tourist fees for hotel stays: Penang Chief Minister
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When it was introduced in 2014, the “local government fee” was envisaged as a way to improve Penang’s tourism infrastructure and promotion.
PHOTO: ST FILE
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GEORGE TOWN – Penang’s Chief Minister Chow Kon Yeow has denied claims that his administration intends to raise the “local government fee” (LGF), effectively collecting more money from tourists staying in hotels.
This comes after reports that the fee was set to be raised by up to 50 per cent in 2025.
“The revenue generated from hotel accommodation fees in the state is insufficient to fund promotional activities and maintain tourism-related infrastructure,” Mr Chow said on Jan 17 at an event, according to Bernama.
“However, the state government has not opted to increase hotel fees, as alleged, and no discussions on the matter have ever taken place.”
He added that the repair of several tourist sites and the construction of new infrastructure for visitors in Penang are largely funded by state government revenue, rather than hotel fees.
Hospitality players in Penang have been miffed since 2023, saying they do not have a voice in how the millions of ringgit collected from tourists through the LGF are spent.
When it was introduced in 2014, the LGF was envisaged as a way to improve Penang’s tourism infrastructure and promotion as jointly decided by a committee consisting of state officials and hotel industry players.
Malaysian Hotel Association Penang chapter chairman Tony Goh said ever since tourists had to pay the LGF on a room for each night’s stay, a joint committee has decided how the LGF revenue was used.
Mr Goh said as at 2023, the collection was channelled directly into state coffers, while hotels were relegated as LGF collection agents.
The reported plan to raise the fee by as much as 50 per cent had raised more eyebrows, given that hoteliers no longer have oversight of the expenditure of the millions of ringgit collected annually.
Mr Goh stressed the importance of ensuring the funds are used productively, with full transparency.
“The funds collected must only be used for tourism and nothing else, which was the original purpose and why hotels were made the collecting agents,” he said.
It was reported on Jan 15 that the state government was considering a proposal to raise the LGF, with the exact quantum not disclosed.
At present, anyone booking hotel rooms in Penang pays an LGF of RM3 (90 Singapore cents) per room each night at four-star hotels or above, and RM2 per room each night at hotels rated three stars and below.
Previous reports indicated the amount collected ranged from over RM8 million to almost RM11 million per year, except for the pandemic-stricken years of 2020 and 2021.
Mr Goh said he wrote to the Chief Minister’s Office in November 2024, requesting a meeting to discuss the use of the LGF, but has yet to receive a response.
“Unless the LGF is used purely for tourism marketing and promotion, I see no reason why the hotels are made to do the collection. It adds to our hotel room rates and becomes a burden,” he said, adding that operators of legal short-term rentals, such as apartments, should also be required to collect the LGF.
Berjaya Penang Hotel general manager Amran Taib said any decision to increase the LGF must be discussed with hotels, who are the prime stakeholders, as their input is critical, and added that any proposed increase now comes at the wrong time.
Prestige Hotel general manager Melvin Ooi said increasing fees at this time would run counter to the more important task of increasing tourist arrivals to Penang. He questioned why only hotels were made to collect this fee when the government had other alternatives.
In response, Penang Island City Council Mayor A. Rajendran stressed that the matter is “only a proposal”. “No quantum of increase has been decided, it’s still under consideration,” he said.
Mr Rajendran said the increase is aimed at serving multiple purposes, including encouraging people from abroad to visit Penang, engaging with airlines, hosting exhibitions and participating in tourism forums.
Meanwhile, state tourism committee chairman Wong Hon Wai confirmed that in September 2023, the “hotel fee trust account” was closed, with the balance of RM9.69 million credited into the state government’s consolidated funds. THE STAR/ASIA NEWS NETWORK
