Saturday, 1 July 2017

(The Star) New reality for tourism industry

The state government is all for implementation of a tourism tax, but feels it would be better to have an engagement session with the tourism industry players before it is implemented.

The tax is set to be implemented at some point this year and is expected to provide funds for the development of the country’s tourism industry.

Passed as part of the Tourism Tax Bill 2017 earlier this year, the tax will see local and international tourists paying a levy to the operators of accommodation premises on a per-room, per-night basis.

The new tax raises the cost per night for high-end accommodations

The rates are RM20 for five-star accommodations, RM10 for four-star accommodations, RM5 for one- to three-star accommodations, and RM2.50 for non-rated accommodations, including budget hotels.

However, it was recently reported that the government may not impose the tax on three-star hotels and below for locals.

The tax has also met with resistance from the Sarawak and Sabah state governments, both of which are seeking its deferment.

The tax will not apply to homestays, kampung stays, premises maintained by religious institutions for non-commercial purposes, premises operated by federal and state governments for non-commercial purposes, and premises with fewer than 10 rooms.

Tourists thronging the Jalan Panglima tourist area. Various tourism bodies in the state are positive about the tax but industry players want a say on how the tax should be implemented. — filepic

Perak State Tourism, Arts and Culture Committee Chairman Datuk Nolee Ashilin Mohd Radzi said the various associations representing the tourism industry in the state are mostly positive about the tax, but she is concerned about its implementation and the effect it will have on businesses if other unregistered hotel businesses are not required to register under the same act.

“Industry players want the chance to speak about how the tax should be implemented. The state government supports the tourism tax as it is levied in other countries and also helps our efforts to promote sustainable tourism in our country.

“However, we feel that clarification must be given at every level so that the tax and its purpose will not be misinterpreted.”

She said a time frame should be considered as legalisation to cover unregistered accommodation providers must be drafted to ensure the effectiveness and fairness of the policy to all those involved in the tourism industry.

Nolee said the state also hopes that the collection of the tax will be distributed back to the states on a fair basis according to the number of hotels and contri­butions collected from each state.

“This should be done in order for us to maintain and keep the tourism environment at a standard that is more than acceptable internationally.”

Foreign tourists crossing the street of Jalan Sultan Yusuff in Ipoh. — filepic

Asked if the implementation of tax will affect domestic tourism in the state, Nolee said, to a certain extent it will affect domestic tourism as there are many uncertainties surrounding the issue.

“Once the issues are resolved and publicly communicated I believe it will be down to the customers to choose the corresponding accommodations according to their affordability.

“The state will help facilitate with the cooperation of travel and tours agencies, hoteliers and product owners to produce competitive packages to attract tourists domestic and international to visit the state especially for Visit Perak 2017.”

Tourism and Culture Minister Datuk Seri Nazri Aziz said last month that the potential revenue from the new tax is projected be around RM654mil annually, if an occupancy rate of 60% can be achieved for the 11 million rooms available in the country.

A higher occupancy rate of 80% would boost collections to RM872.8mil.

Perak Tourism Association President Mohd Odzman Abdul Kadir said with or without the tax, tourism in the state will still go on and he believes that people will not mind paying extra.

However, he stressed that the revenue from the tourism tax should be returned to the state governments based on the total tax collection in the states.

“For example, Kelantan has fewer registered hotels than Perak, so if the tourism tax is redistributed equally, it will not be fair to states with more accomodation providers.”

“Many have also stated that it is being implemented to abruptly and there should have been a more gradual time frame.

“However, this tax is implemented around the world.

“The revenue generated is meant for governments to implement the promotion of tourism. Hoteliers feel there should be a discussion first, but I feel people will come to accept the implementation of the tax,” Mohd Odzman said

State Tourism, Arts, Culture, Communication and Multimedia Committee chairman Datuk Nolee Ashilin Mohd Radzi : Clarification must be given at every level so that the tax and its purpose will not be misinterpreted.

A tourist, who only wanted to be known as Adil, said the tax should be implemented later and should be on a per-stay basis rather than per night.

“It may be taxing for those who are staying for more than a night. Nobody wants additional charges.

“Also, it is being implemented too early. Some tourists might get a jolt. We should have been done it more gradually and with more consultation with tourism bodies. If it is implemented, then I guess we have to deal with it. I don’t think tourism will be affected because lots of people here love travelling,” said the civil servant.

Another tourist S. Naveen, 31, said he might just opt for day trips to Ipoh instead of staying overnight in hotels due to the tax.

The engineer from Kuala Lumpur said he usually stayed a night in Ipoh, but he might not do so anymore except if there was an important reason to do so.

“Ipoh is a cheap destination, and hotels here are pretty affordable too, but I expect hotel occupancy rates in the state will be affected due to the tax.

“It is being implemented too soon. It should be discussed. We understand that it is meant to help boost tourism in the country, but it should have been done systematically.

“At the end of the day, tourists are the ones who will be affected by this move. They should have thought about that before implementing the tax.”