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Press Collections 05 June 2011
Growth Of Budget Hotels And Homestays Stunted By Officialdom

Cheap accommodation: Budget hotels are doing well in the state. 

Kuching: Red tape has created unnecessary hurdles for one of Sarawak’s most important tourism sectors budget accommodation. 

It’s a well known industry secret that many budget hotels and homestays are without business licences.  

There are at least 30 affected hoteliers in Kuching alone, according to a recent state level tourism lab report. The proprietor of one hotel in Kuching, which submitted documents for approvals three years ago, called the entire application process “endless”. She told The Star that the biggest loser was the Government. 

“Not only does it discourage the establishment of more budget hotels, but the Government ends up not being able to collect business taxes,” the proprietor said. 

Present regulations require councils to give the final clearance, before the Registrar of Companies can issue business licences. But councils need approvals from agencies like the Fire and Rescue Department and the police on concerns like fire hazards and possible noise pollution. 

The process is convoluted and tedious. According to people in the know, they say the problem does not lie specifically with local councils but councils have become the scapegoat of wider bureaucratic issues. 

The hotelier whom The Star spoke to claimed her business details were submitted to the council three years ago. “We hired lawyers and architects to do the paper work and draw up blue prints. To this day, we’ve not heard from the authorities. 

“We don’t remember how many steps there are to take to get a licence,” the proprietor said. “One authority pushes you to another. We go to the council, they tell us we need something from the State Planning Unit, which tells us we need to go to the Fire and Rescue Department and then to the police.” 

The matter is not new and has been known to authorities for years. Just as well, the budget accommodation sector continues to thrive in Sarawak. 

But last week, the issue made the news with the coming tourism peak season, largely boosted by the Rainforest World Music Festival. 

Sarawak Homestay Association chairman Mahmud Sabli complained that there were no laws to punish unlicensed establishments. Mahmud said the rising number of unlicensed homestays were eating into licensed operators’ market share. 

The Sarawak Tourism Federation (STF) is taking a strong stand, urging the federal Tourism Ministry to step in to solve the problem quickly. STF president Audry Wan Ullok said blame should not be placed on operators, but on the wider issue of red tape. 

In an interview with The Star, Audry said the application process involved so many steps that it has now become “a grey area” for the industry. 

“The Federal ministry has the authority and power to move things forward, as it involves government and semi government agencies. The law needs to be completely revised.

After all, hotel permits are issued by the ministry.” Singgahsana Lodge, one of Kuching’s better established budget hotels, had to wait six years before all its licences and permits were obtained, she said. 

For now, she said, unlicensed operators must not be penalised until the application procedure was streamlined. More recently, the matter was one of four urgent issues discussed at a state level tourism lab held in March. 

A subsequent lab report concluded that more than 10 of the affected hotels were within the Kuching North City Commission’s jurisdiction and about 20 in Kuching South City Council.




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