KUALA LUMPUR (April 6): The new tourism tax bill that was just passed could impact and drag the hotel business especially with the rising cost of living and higher inflation in 2017, according to KLCCP Stapled Group.

"We are not overly optimistic with the market, especially with the incoming additional taxes. Let's not forget that we had the minimum wage imposed. All of these will affect the hotel segment," said KLCC Property Holdings Bhd chief executive officer Datuk Hashim Wahir.

Speaking to the media today, Hashim shared that with tourism tax, there is a need to seek more value and contribution from the government, which is collecting the tax, as hotel guests will expect more value for the amount they are paying.

When asked on the types of contribution from the government, Hashim shared that the government would need to provide the right support and facilities for tourists who come to Malaysia.

Hashim said the hotel business is always facing challenges in terms of pricing, as there is limited room for the increase of average room rate.

"Occupancy rate for Mandarin Oriental was around 47% last year and is expected to remain stable," he said, adding that this is despite the expectation of more tourists in Malaysia this year.

KLCC Property and KLCC Real Estate Investment Trust, collectively known as KLCCP Stapled Group, is Malaysia's largest self-managed stapled security that invests, develops, owns and manages a stable of iconic and quality assets.