The hospitality sector in Kota Kinabalu is under immense strain following the government’s decision to implement a significantly higher hotel licensing fee. The Malaysian Association of Hotel Owners (MAHO) has voiced strong opposition to the move, arguing that it will create financial difficulties for hotel operators and negatively impact tourism.
Previously, hotels in Kota Kinabalu paid a flat fee of RM10 per room per year. However, the revised fee structure now requires Class 1 hotels to pay RM4.65 per occupied room per day, Class 2 hotels RM2.65, and Class 3 hotels RM1.30. For a 100-room Class 2 hotel with 60% occupancy, this translates to RM57,600 per year—an enormous increase from the RM1,000 previously charged.
MAHO President, Datuk Ngan Teng Ye, has questioned the criteria used to categorize hotels under this system, stating that Malaysia follows MoTAC’s 1-5 star and 1-3 Orkid rating framework. The sudden introduction of a different classification system without clear justification has left many hotel operators confused and concerned.
Another pressing issue is the government’s continued lack of action on unlicensed STRA accommodations. While registered hotels are being subjected to these new fees, more than 2,500 Airbnb listings in Kota Kinabalu continue to operate without proper regulation or taxation. For years, MAHO, MAH, and MyBHA have pushed for the government to introduce fair regulations to ensure all accommodation providers contribute equally to the industry. Despite these efforts, little progress has been made.
The increase in hotel licensing fees could not come at a worse time. With Visit Malaysia 2026 on the horizon, higher accommodation costs may make Kota Kinabalu less appealing to tourists, potentially leading to a decline in visitor numbers. Additionally, businesses that depend on tourism, such as restaurants, transportation services, and tour operators, may suffer from the ripple effects of this decision.
MAHO is urging the Sabah State Government to reconsider the implementation of the new licensing fees and engage with key industry players to develop a more balanced and sustainable policy. If no action is taken, the long-term impact on Kota Kinabalu’s tourism sector could be devastating.
