Hoteliers seek targeted employment, wage support

KUCHING: Sarawak hoteliers are seeking targeted Budget 2027 support as rising operating costs and persistent manpower shortages continue to squeeze industry margins.

Malaysian Association of Hotels (MAH) Sarawak Chapter representative John Teo said the sector’s overall operating costs had increased by about 30 per cent in recent years, with wages, electricity, food supplies and maintenance among the key pressures.

“Hotels are currently facing pressure from multiple areas. Material costs are increasing tremendously after COVID-19 pandemic, labour costs are ever increasing,” he told Sarawak Tribune.

He said hotels also faced difficulties passing higher costs on to consumers due to intense market competition and limited spending capacity.

Teo said the proposed increase in the minimum wage from RM1,700 to RM2,000, if approved, would place further pressure on hotel operators, particularly those dependent on large workforces.

“If the increase in minimum wage is approved, we hope the government will subsidise the difference in increment at least for the whole year of 2027,” he said.

He said Budget 2027 should also provide targeted employment and wage support, particularly for small and medium-sized hotels, together with greater training subsidies to help operators develop and retain local talent.

Manpower shortages, he said, remained particularly acute in housekeeping, food and beverage, kitchen and frontline service positions.

Teo said the industry could not rely solely on recruitment to address the problem and needed to improve productivity through training, technology and automation.

He proposed increased support for technologies such as self-check-in systems, smart room management, digital staff scheduling and automated laundry equipment.

“We are not looking for technology to completely replace employees. Rather, we hope technology can reduce repetitive tasks, allowing employees to focus on higher-value services while improving the overall productivity of the hotel industry,” he said.

Teo also called for dedicated funding for hospitality training to upgrade service standards and help hotels adopt artificial intelligence technologies across hotel operations.

He said smaller hotels should receive particular attention as they often faced greater financial constraints when investing in digital transformation.

On taxation, Teo said Budget 2027 should consider reviewing the tax burden on the hotel industry and providing incentives for equipment upgrades, energy-efficient facilities and digitalisation.

He also called for clear and stable tax policies to enable operators to plan for the long term.

However, Teo said support to reduce operating costs should be complemented by measures to expand Sarawak’s visitor base.

“Improving air connectivity, on the other hand, has the potential to expand our visitor base and bring more tourists to Sarawak,” he said.

He called for greater cooperation with airlines to develop new routes, increase flight frequencies and strengthen Sarawak’s connectivity with regional markets.

Teo said stronger visitor arrivals would benefit not only hotels but also food and beverage, retail, transportation and other tourism-related sectors.

He said Budget 2027 should therefore balance measures to ease operating pressures with initiatives that could generate stronger tourism demand and support sustainable growth of the wider tourism ecosystem.