For decades, hotels in Kota Kinabalu have been an integral part of the city’s tourism industry, offering travelers a place to stay while creating thousands of jobs for locals. However, a sudden policy change threatens to upend everything. The recent hike in hotel licensing fees has sent shockwaves through the industry, leaving hoteliers scrambling to figure out how to survive.
Hafizan Wong, a hotel owner who has spent years building his business, now finds himself faced with a daunting reality. Under the previous licensing structure, his hotel paid just RM10 per room per year. Now, under the reinstated 1966 fee structure, he is looking at an annual fee of RM57,600—an increase so drastic that it could wipe out his profits entirely. With a heavy heart, he admits that he may have no choice but to raise prices or lay off staff. The idea of closing down, something he never imagined before, is now a real possibility.
The problem runs deeper than just high fees. Hotels like Hafizan’s are being unfairly targeted while unlicensed Short-Term Rental Accommodations (STRA) continue to operate unchecked. These STRA operators do not pay the same taxes, do not follow the same safety regulations, and yet, they are not subject to the same financial burdens. “How is it fair that those of us who follow the rules are the ones being punished?” Hafizan asks.
The impact of this policy is not limited to hotel owners. It affects the entire tourism ecosystem of Kota Kinabalu. Higher room rates could push travelers to seek cheaper alternatives elsewhere, hurting local businesses that rely on tourism. Job losses within the hospitality sector could leave many employees struggling to make ends meet. Even the city’s reputation as a welcoming and affordable destination could suffer, driving potential visitors to other locations.
MAH President Datin Christina Toh has made an urgent appeal to the Sabah State Government, urging lawmakers to reconsider the decision. She acknowledges the need for hotels to contribute to the city’s development but insists that this must be done in a fair and balanced way. Instead of imposing sudden and overwhelming costs on law-abiding businesses, she argues, the government should first regulate unlicensed accommodations and ensure that all players in the industry contribute equally.
The situation remains uncertain, but one thing is clear: if no action is taken, many hotels may not survive. Kota Kinabalu’s tourism industry stands at a crossroads, and the decisions made now will determine its future. Will lawmakers listen to the concerns of the industry, or will they allow businesses to collapse under the weight of unsustainable costs? For Hafizan and many others, the answer could mean the difference between staying open and closing their doors forever.
