Malaysia is one of Asia's biggest employers of foreign labour. But recently, cases of deaths, abuse and forced labour have come to light. What is going on? Who is protecting these migrant workers?
PETALING JAYA: A new tourism tax bill passed by Parliament last week could hurt hotel owners, including Genting Malaysia Bhd and Sunway Real Estate Investment Trust (REIT), CIMB Research said in a report.
The bill will allow the government to impose a tourism tax on a tourist staying at any accommodation premises made available by an operator at the rate fixed by the minister in accordance with the law.
“It is not clear when the new tourism tax will take effect,” CIMB Research said.
Potential revenue from the new tax would be around RM654mil, if an occupancy rate of 60% can be achieved for the 11 million “room nights” available in the country, according to Tourism and Culture Minister Datuk Seri Nazri Aziz.
A higher occupancy rate of 80% will boost collections to RM872.8mil.
The tax, Nazri said, will provide a sustainable fund for the development of the tourism industry.
CIMB Research, however, viewed the latest tax measure as a negative development for the hotel sector that could lead to an “uneven playing field” between licensed and unlicensed hotel operators.
“Hoteliers may not be able to pass on all the additional tax to the tourist as the hotel occupancy rate in the country was only 61.9% in 2015,” it said.
Among stocks under its coverage, Genting Malaysia, Sunway REIT and KLCC Property Holdings Bhd may be negatively impacted by this new development, assuming that the new tax to be imposed is absorbed by the companies.
“However, our estimates reveal that the potential earnings impact from this development is minimal,” at 1%-2% of next year’s net profit.
Genting Malaysia currently has seven hotels with more than 10,000 rooms in total.
As at end-2016, the group’s average occupancy rates stood at 93%.
Sunway REIT owns five hotels with 2,090 rooms in total, which achieved average occupancy rates of 66.7% last year.
KLCCP owns the five-star Mandarin Oriental Kuala Lumpur, which has 632 rooms.
The report said the Malaysian Association of Hotels was briefed about the new tax in January.
Address: Wisma MTUC,10-5, Jalan USJ 9/5T, 47620 Subang Jaya,Selangor | Tel: 03-80242953 | Fax: 03-80243225 | Email: sgmtuc@gmail.com.com