The Malaysian Association of Hotel Owners (MAHO) has expressed deep concern over the drastic hike in hotel licensing fees in Kota Kinabalu. The sudden implementation of the 1966 fee structure has put registered and licensed hotels under significant financial strain.
Previously, hotels only had to pay RM10 per room per year for their licenses. However, with the new fee structure, Class 1 hotels must now pay RM4.65 per occupied room per day, Class 2 hotels RM2.65, and Class 3 hotels RM1.30. This change represents a massive surge in operational costs. A Class 2 hotel with 100 rooms and a 60% occupancy rate, for example, would now need to pay RM57,600 per year—compared to just RM1,000 annually under the previous system. Such an increase is unsustainable and will likely force hotels to raise their room rates, which could drive tourists away.
MAHO President, Datuk Ngan Teng Ye, has questioned the criteria used to classify hotels under this system, pointing out that Malaysia officially follows the Ministry of Tourism, Arts, and Culture’s (MoTAC) 1-5 star and 1-3 Orkid ratings. The lack of clarity surrounding this classification has left many hotel operators frustrated.
Adding to the industry’s woes is the fact that unlicensed Short-Term Rental Accommodations (STRA), such as Airbnb, remain unregulated. While there are only 214 registered hotels in Kota Kinabalu, there are more than 2,500 STRA listings, none of which are subject to the same licensing fees or regulatory oversight. For years, MAHO, along with MAH and MyBHA, has urged the government to impose regulations on STRAs to ensure a level playing field, yet little progress has been made.
With Visit Malaysia 2026 approaching, the timing of this fee hike could not be worse. Increased operational costs will likely make Kota Kinabalu a less attractive destination for travelers, negatively impacting not only hotels but also local businesses that depend on tourism. MAHO is calling for an immediate suspension of the new licensing fees and urges the Sabah State Government to engage with industry stakeholders to find a fair and balanced solution.
