Malaysian Tourist Guides Council president Jimmy Leong said the allocation would be “a good starting point” but there should be more allocations for the building and development of infrastructure such as airport facilities and public transport.

The Malaysian Budget and Business Hotels Association said a 2% increase in service tax will lead to a rise in costs, inadvertently leading to negative effects in the long-term.

“We are also disappointed that there is no change in efforts to raise the annual threshold for service tax for the hotel industry from RM500,000 to RM1.5 million,” said the association’s president Sri Ganesh Michiel.

Businesses are required to pay service tax if the total value of taxable services within a year exceeds the threshold.

Ganesh said raising the threshold to RM1.5 million would allow customers, especially those from the B40 group, to enjoy affordable room rates without feeling burdened by the service tax increase.

He also repeated his call for more regulations on short-let accommodation and online travel agencies.

The budget allocation of RM350 million will cover the Visit Malaysia 2026 campaign, and provide matching grants for charter flights and to support Islamic tourism.

Some RM20 million has also been allocated to upgrade and maintain selected tourism spots, including those in Perlis, Pahang and Negeri Sembilan.

Malaysian Tourism Agency Association president Khalid Harun hoped that the government could set aside funds to train more local workers, to reduce dependence on foreign labour, as local workers played a vital role in promoting the uniqueness of Malaysian culture.

Airbnb’s head of public policy for Southeast Asia Mich Goh said some key budget initiatives should also be extended to Airbnb hosts.