MIRI: The Malaysian Association of Hotels (MAH), Sarawak Chapter is urging Miri City Council (MCC) to take immediate action against unlicensed hotel operators that will have a negative impact on the employment sector and tourism in the city in the long run.
Its honorary secretary-general, John Teo Peng Yew said currently, the negative impact of unlicensed hotels in Miri City had already been felt by licensed hotel operators here with an estimated losses of RM100 million per year from 2014 to 2017.
“From Jan 1 to Dec 31 2017, approximately one million hotel room nights were taken by unlicensed hotel operators in Miri City at an average room rate of RM70 per night.
It is estimated that unlicensed rooms will reach 3,500 if additional rooms are not being controlled,” he told Bernama here yesterday.
Additionally, he said, many licensed hotel employees were losing their jobs because of the low room demand as unlicensed hotels were less labour-intensive than licensed hotels because they did not require the same level of service.
“With lesser demand for licensed hotel rooms comes another negative effect for these hotels and their employees as the money guests would have spent on food and beverages at their restaurants and bars is likely spent elsewhere,” he said.
Teo estimated that licensed hotel operators suffered more than RM50 million in food and beverage revenue losses because travellers chose to book with unlicensed hotels in Miri City.
“In Miri City, there are about 3,000 rooms operated by 33 licensed hotels.
However, there are more than 3,000 rooms provided by over 75 unlicensed hotels,” he said.
Teo said in 2014, licensed hotel operators could generate RM230 million in revenue, with the average room occupancy up to 83 per cent and average room rate of RM255.
But with the sudden growth of unlicensed hotels, he said the average room occupancy for licensed hotels dropped to 50 per cent, with the average room rate reduced to RM170, a drop of RM85 per room in revenue.
Teo also cautioned that unlicensed hotels could put their guests at high risk because they were not protected against any third party liability in the event of a fire, theft or accident, while the local authority would have to face the consequences if such incidents resulted in death.
“Licensed hotels have to comply with the Fire and Rescue Department’ requirements, including equipping their premises with fire-detection and fighting systems, as well as having security measures in place,” he noted He said a minimum of 44 licences needed to be approved for a three-star and above hotel with the process taking a minimum of 166 days.
Miri City Mayor, Adam Yii Siew Sang said unlicensed hotels in Miri City had been given nine months to get a provisional licence from MCC to operate by complying with several key safety requirements. — Bernama