Ganesh Michiel, deputy president of the Malaysia Budget and Business Hotel Association (MyBHA), told a press conference today that unregulated practices of online travel agencies (OTAs) and short-term residential accommodation (STRA) rentals such as Airbnb had cost the government billions in taxes and must therefore be highlighted in the 2022 budget.
Speaking on the effects, he said OTAs, usually run by foreigners, were charging high commissions for sale of hotel rooms, which was directly affecting hotel operators.
Many hotel operators have complained of not getting enough profits to continue their business.
Some OTAs would also offer binding loans to hotel operators and threaten to terminate the online accounts of any hotels that refuse to cooperate.
Budget hotels are also made to pay digital tax payments or other charges that have been transferred to them by the OTAs.
“This has also created a ‘selling price war’ where the selling price for hotel rooms are getting lower day by day despite increasing operating costs.”
Other than that, their practices are also unfair for licensed and registered travel agencies currently struggling due to Covid-19 border restrictions.
Meanwhile, short-term residential accommodations and Airbnbs do not need to adhere to any standard operating procedures and they do not require operating permits from the government.
“Therefore, they do not need to pay any taxes to the government.
“Hotel industry players have long been affected by this ‘industry threat’ due to the absence of a law regulating OTAs and guidelines for short-term accommodation facilities. This is long overdue.
“The use of online services has increased (due to Covid-19) and we would like to state that all efforts to revive the hotel and tourism industry will not be realised or successful if the government still fails to resolve these threats.”
Meanwhile, speaking on the Langkawi travel bubble, MyBHA national president Emmy Suraya said budget hotels do not stand to gain much as most four-star and five-star hotels have lowered their rates as part of their promotions.
Budget hotels on the island had reported fewer bookings when compared to four-star and five-star hotels, she said.