Sarawak hotel overheads up by 30% in two years, says hotelier

Hotel operators in Sarawak have seen their overheads increase by 30% over the last two years, which they attribute to higher labour, utility, food, material and maintenance costs, a hotelier said today.

Material costs rose significantly following the Covid-19 pandemic, while labour costs continued to increase, said John Teo, Sarawak chairman of the Malaysian Association of Hotels.

He said electricity and water costs had also increased, as hotels needed to replace older meters, the Borneo Post reported. These increasing costs were reducing profit margins, and operational costs could surge further if the government approves the proposal to increase the minimum wage to RM2,100 from the current RM1,700.

Teo said hotels needed to maintain adequate manpower to ensure smooth operations and service quality regardless of occupancy. “Even when occupancy fluctuates, essential functions such as housekeeping, equipment maintenance and basic front-line services still need to be carried out continuously,” he was quoted as saying.

Teo called for government support measures, including initiatives in the 2027 federal budget, to take into account the actual operating conditions of hotels of different sizes. The 2027 budget will be tabled on Oct 9. He said the government should avoid a one-size-fits-all approach.

Teo also called for targeted support to strengthen Sarawak’s air connectivity, including opening new regional and international routes and increasing flight frequencies.

The government should work with airlines to chart new routes and consider temporary promotional or operational support for routes with strong tourism potential.