Currently, visitors staying in four-star hotels and above pay RM3 per night for the tax, while those in three-star and below are charged RM2.

The proposed hike comes as the state seeks to enhance its tourism offerings and fund related infrastructure, said Penang Island City Council (MBPP) mayor Rajendran Anthony.

“We’ve been considering this increase for some time now. While I can’t provide an exact figure yet, a 50% rise is likely,” he told reporters at the opening of a hotel at Farquhar Street here.

Chief minister Chow Kon Yeow, who was with him, said the current fees introduced many years ago had been instrumental in supporting tourism promotions and infrastructure development.

He said this was to meet the demands of Penang’s growing reputation as a world-class tourist destination.

Over RM72 million has been collected from the Penang island and Seberang Perai city councils since the hotel fee was introduced in 2014, according to a state assembly reply.

In 2014, RM3.7 million was collected, rising to RM8.6 million in 2015. This increased further to RM9.4 million in 2016 and RM9.8 million in 2017.

In 2018, the amount dropped slightly to RM9.6 million and to RM9.4 million in 2019.

During the pandemic, collections fell sharply to RM3.5 million in 2020 and just RM92 in 2021.

As tourism recovered, the amount increased to RM3.8 million in 2022 and hit a record RM10.6 million in 2023.

In 2024 up to September, the state has collected RM8.6 million.