Malaysia budget travel segment suffers from tourism tax

Published on : Sunday, September 10, 2017

Malaysia’s George TownWhile agents operating out of Singapore are of the opinion that they are not seeing a
decrease in demand for Malaysia after the imposition of tourism tax, trade players in the
destination are concerned that the budget travel segment might take a hit because of the

Joe Lim, executive director of Singapore’s Konsortium Express & Tours said, “The news had been discussed for some time before finally being implemented. Customers have accepted it and it’s not turning them off from visiting Malaysia.”

Lim added that the exchange rates for the Malaysia ringgit have also made the price
difference “negligible”.

Some confusion may arise from budget hotels not clarifying that they are collecting the tax, leading guests to mistake it for room payment.

Aside from this minor hiccup, customers are “quite accepting” of the tax, especially as
“hotels are not that expensive” even in capital city Kuala Lumpur. However, this acceptance does not come easy for the more price-sensitive segments – including younger travellers from the region and backpackers from longhaul countries.

Raaj Navaratnaa, general manager at the Johor-based New Asia Holidays Tours & Travel, shared that he had a group of 30 youth from Singapore refuse to pay the tax as it was not included in the package price.

Alex Lee, CEO at Ping Anchorage Travel & Tours based in Terengganu said, “In the long run, I foresee backpackers from longhaul destinations shortening their stay in Malaysia and neighbouring countries like Indonesia and Thailand benefiting from it.


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