RAJ REPORT

Bed tax on Penang hotels , but Cairns Regional Council donates $2 million of ratepayers money to TTNQ———————-All hotel guests in Penang can expect to pay a bed tax from June 1, the proceeds of which will be used for tourism development and promotion including, some believe, the funding of a new Penang convention and exhibition bureau. Hotels were informed on March 5 that the tax, called Local Government Fee, will cost RM3 (US$0.93) per room per night for four- and five-star hotels, and RM2 per room per night for three-star hotels and below, including dormitories, budget hotels, hostels and guesthouses.

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June 9, 2014
Starting from June 1, guests will have had to pay a fee for overnight stay in the state’s bid to promote tourism from the proceeds collected.
UPDATED
bed tax400x200GEORGE TOWN: All hotel guests in Penang can expect to pay a bed tax from June 1, the proceeds of which will be used for tourism development and promotion including, some believe, the funding of a new Penang convention and exhibition bureau.
Hotels were informed on March 5 that the tax, called Local Government Fee, will cost RM3 (US$0.93) per room per night for four- and five-star hotels, and RM2 per room per night for three-star hotels and below, including dormitories, budget hotels, hostels and guesthouses.
The fee will be imposed on guests staying in hotels from June 1 regardless of whether bookings and payments were made and received before the implementation date.
Hotel operators are to collect the fee and hand it over to the Penang Island Municipal Council at the end of every two months. The fee will be channelled into a special trust account established by the state government under the control of the state finance department.
A special committee chaired by Chief Minister Lim Guan Eng and including hotel representatives will decide how the proceeds will be spent.
Andy Teh, group director of sales and marketing of Eastern & Oriental Hotel Penang, said: “This is good for the destination if the fund is wisely spent and if the tourism board is mature enough to understand the macro role it has to play.”
The tax comes as Penang undergoes a “reinvention” in the arts and heritage, and in the MICE (meetings, incentives, conferences,and exhibition) sector where two new convention centres, the Subterranean Penang International Convention & Exhibition Centre and the Penang Waterfront Convention Centre, will open in 2015 and 2017 respectively.
“With the new venues, it is the right time for Penang to have a convention bureau,” said Ho Yoke Ping, general manager-sales & marketing of Malaysia Convention & Exhibition Bureau.
Meanwhile, the Malaysian Association of Hotels Penang Chapter (MAH-P) welcomed the hotel room levy imposed in the state.
Its chairman, Mary Ann Harris, said the tax funds could be used to upgrade, promote and market tourism activities in Penang.
She stressed that the hotel bed tax would stimulate local tourism industry in the long run.
“We can upgrade and develop major tourism attractions, such as the National Park. It would be a boost to the industry,” Mary Ann told FMT.
However, the “bed tax” came under fire from the Penang Malay Congress whose president Rahmad Isahak described it as “bizarre and irrational”.
Rahmad said not only was this new form of tax irrational , it would also jeopardise the business of hotel operators while putting an additional burden on the people.
He said the state government should have been more transparent and taken its time to explain to the people the mechanisms of this tax instead of being too eager to impose it on June 1.
Rahmad said the tax was a liability to the people and feared the state government would introduce more such forms of taxes that would burden the people more in the near future.
He added that hotel operators would have no choice but to go along with the new bed tax or the state government would refuse to renew their licences.
For now, it appears that tourists in Penang had better camp under a starlit night instead of getting fleeced at a hotel.

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