Kota Kinabalu mayor Datuk Seri Sabin Samitah doesn’t want to talk about hotel licensing fees.

The Kota Kinabalu mayor, whose office oversees business licensing in the city, distanced himself from the controversy this week, saying the final decision is up to the State Cabinet.

“The Cabinet will make the final decision,” he said when pressed on the matter on Friday. 

The new licensing fees replace the long-standing RM10-per-room annual charge with a structure that charges hotels per room per day. 

Under the reinstated 1966 rates, Class 1 hotels now pay RM4.65 per room per day, Class 2 hotels RM2.65, and Class 3 hotels RM1.30.

Industry leaders aren’t happy. The Malaysian Association of Hotels (MAH) Sabah/Labuan Chapter, the Sabah Tourist Association (STA), and the Malaysia Budget & Business Hotel Association (MyBHA) are all sounding the alarm. 

They argue that the sudden and extreme increase is crippling businesses already struggling to recover from the pandemic.

STA warned that the move could force smaller hotels and budget accommodations to shut down.

“Not all hotels are high-end establishments. Smaller operators will be the hardest hit. This could lead to layoffs, higher room rates, and fewer options for budget travelers,” a representative said.

MyBHA also raised concerns over the fairness of the licensing structure, pointing out that short-term rental accommodations (STRA) are not subject to the same fees.

In 2024, Sabah’s tourism industry generated RM7.28 billion from 3.14 million tourist arrivals, with Kota Kinabalu, as the state capital, contributing a significant portion to this revenue. – March 7, 2025