The Borneo Post

Licensed hotels in Miri face stiff competitio­n

- By Cindy Lai reporters@theborneop­ost.com

MIRI: The hotel industry here is facing a rough time, especially with the Visit Miri Year campaign this year; that is the competitio­n between licensed and unlicensed hotels, budget hotels as well as homestays offered through Airbnb.

While there are over 3,000 rooms offered to tourists and travellers by over 30 licensed hotels, motels and inns, the steep competitio­n they are facing against 3,000 rooms offered by over 75 unlicensed hotels, motels and inns is unimaginab­le.

Malaysia Hotel Associatio­n, Sarawak Chapter honorary secretary- general John Teo shared with The Borneo Post how the unfair competitio­n between both sides had affected the industry, creating imbalance amongst hotel operators despite Miri welcoming what seemed to be the most important year for the its tourism industry.

“Four years ago, the licensed hotels could easily generate a total of RM230 million in revenue, with average room occupancy from 75 per cent to more than 80 per cent. For your informatio­n, at the time, average room rate was about RM255.

“In recent years, with the sudden surge of unlicensed hotels, motels, and Airbnb offering various options for homestay service, the overall room occupancy at licensed hotels has dropped to less than 50 per cent, forcing the room rate to be reduced to about RM175 per room to attract more customers.

“Back in 2014, a 5- star rated hotel enjoyed an average rate of RM520 per room a night, and now the price has been reduced to only RM260 per room a night whilst a 4- star rated hotel offered price at an average of RM320, but now the same standard hotel offers about RM160 per room a night or less.

“While the facility and services

In recent years, with the sudden surge of unlicensed hotels, motels, and Airbnb offering various options for homestay service, the overall room occupancy at licensed hotels has dropped to less than 50 per cent, forcing the room rate to be reduced to about RM175 per room to attract more customers.

provided at these licensed hotels are still the same, however, the profit made by these legitimate accommodat­ion providers has drasticall­y reduced. That unfortunat­ely may force retrenchme­nt due to decreasing room demands, which is very unhealthy for the whole economy,” said Teo.

With lesser demand, he said the domino- effect is happening to various services that are offered to guests at the hotels, such as spa, business centre, food and beverage outlets like restaurant­s and bars /lounges.

“It is often true that travellers may have less demand on the quality of the accommodat­ion service, because their main objective is to travel around on a budget, and spend when only necessary.

“Even so, the hotels that offer higher standard of quality services are aiming to be on par with the market demand, by lowering their rate and at the same time offering a comfortabl­e stay,” Teo said.

Teo stressed that while travellers and tourists may opt for cheaper, affordable option, safety measures must not be taken for granted.

“Licensed hotels have to comply with the Fire and Rescue Department ( Bomba) requiremen­ts including equipping the premises with fire detection and fire- fighting system, as well as having security measures in place.

“In comparison, unlicensed hotels may have higher security risk for fire, theft, burglary, accidents etc. Without Bomba’s fire certificat­e, they are unable to obtain the occupation­al permit (OP). Hence, they are unlicensed premises.

“If, unfortunat­ely, accidents occur at the premises, the operators and guests will not be protected by insurance. In short, the consequenc­es could be very serious and devastatin­g,” added Teo.

Other basic requiremen­ts that operators of 3- star and above hotels must adhere to are: they must obtain at least 44 licences including Bomba fire certificat­e; registrati­on with the Ministry of Tourism Malaysia; Innkeepers Act 1952; Registrati­on of Guests Act 1965; total insurance coverage; trading licences; local authoritie­s building approval and by-laws; electricit­y tariff rating; security and safety guidelines with the police department as well as compliance with the Personal Data Protection Act 2010.

The process for all the licences usually takes up to about 166 days, and the guidelines to these are listed under the Malaysia Administra­tive Modernisat­ion and Management Planning Unit ( Mampu).

Therefore, Teo stressed that tourists travelling here must always check on safety of the premises and possible risk when they are looking for accommodat­ion.

Teo hoped that the Miri City Council ( MCC) and other relevant authoritie­s could enforce stricter law against the unlicensed premises in order to protect the interest of both the hotel operators and guests.

“Based on the statistics that we have collected from Jan 1 to Dec 31, 2017, it is possible that we are looking at approximat­ely one million hotel room nights taken up by unlicensed hotels/motels, etc at an average room rate of RM70 per night.

“If the situation is not controlled, we are anticipati­ng more losses by licensed hotels,” he said.

John Teo, Malaysia Hotel Associatio­n, Sarawak Chapter honorary secretary-general

 ??  ?? A night view of Miri City. There is an imbalance in the hotel industry between licensed and unlicensed hotels/motels/inns/homestays.
A night view of Miri City. There is an imbalance in the hotel industry between licensed and unlicensed hotels/motels/inns/homestays.
 ??  ?? John Teo
John Teo

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