MIRI: The Malaysian Association of Hotels (MAH), Sarawak Chapter is urging Miri City Council (MCC) to take immediate action against unlicensed hotel operators as it has 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 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 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: 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 the city. “In Miri, 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 income of some RM230 million, with average room occupancy rate at 83 per cent and average room rate at 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 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. According to Mayor Adam Yii Siew Sang, unlicensed hotels in the city had been given nine months to get a provisional licence from MCC to operate by complying with several key safety requirements.
“One of the requirements is the Fire and Rescue Department certification for obtaining the provisional licence. Furthermore, they need to comply with other requirements set by MCC to get a proper licence,” he said.
Yii said MCC had to take into account certain types of visitors to Miri who preferred to stay at budget hotels which were mostly operated by unlicensed operators, instead of four or five-star hotels. He said MCC had a meeting with unlicensed hotel operators in December 2017 and they were told to obtain the licence or face stern action by the city council.
