GEORGE TOWN, Oct 7- Tourism industry stakeholders are urging the Federal Government to increase allocations for Penang under Budget 2026, saying a larger share would enable the state to enhance its tourism promotion and maintain its position as one of Malaysia’s leading destinations ahead of Visit Malaysia 2026 (VM2026).
Malaysian Association of Hotels (MAH) Penang chapter chairman Datuk Tony Goh said additional funding would strengthen Penang’s tourism ecosystem and ensure sustainable development across its attractions.
Currently, the Federal Government redistributes 50 per cent of tourism tax revenue collected from each state. We hope the allocation for Penang can be raised to at least 70 per cent, in line with the state’s contribution to the national tourism industry,” he said, adding that Penang continues to serve as a hub for investment and development.
Malaysian Association of Themeparks and Family Attractions (MATFA) president Tan Sri Richard Koh said targeted grants for sustainability, infrastructure, and training would further raise industry standards and create more employment opportunities.
He noted that global visibility was equally vital, saying international travellers must be reminded that Malaysia offers not just beaches and heritage attractions, but also world-class family-oriented entertainment and leisure experiences.
Association of Tourism Attractions Penang chairman Datuk Ch’ng Huck Theng, meanwhile, called for early announcement of the 2026 tourism programmes to enable both local and international tourists to plan their trips.
“To maximise the impact of VM2026, the events calendar should be made available soon, giving travellers ample time to make their arrangements,” he said.
Penang Tourist Guides Association chairman Clement Liang said Budget 2026 should also focus on infrastructure improvements, particularly to address traffic congestion around key travel hubs such as the Penang International Airport.
He said better public transport connectivity, more buses, and proper parking facilities were essential to support the state’s growing visitor numbers. Liang also proposed dedicated venues and government incentives to promote Penang’s cultural performances.
“Penang’s strength lies in its food, heritage and culture. However, we must ensure basic facilities are well maintained, walkways are clear, and hygiene standards remain high to ensure tourists feel safe and comfortable,” he added.
Penang Convention and Exhibition Bureau (PCEB) chief executive officer Ashwin Gunasekeran said the state’s meetings, incentives, conferences and exhibitions (MICE) sector continues to perform strongly but faces rising operational costs.
He said the service tax (SST) has added pressure on event organisers and clients, as bundled charges for manpower and other services often raise overall costs despite rental services not being directly taxed.
“Given that cost competitiveness is a crucial factor in securing bids, the government could consider SST exemptions or waivers for the MICE industry under VM2026. Without such support, Malaysia risks losing potential events to regional competitors offering better rates,” he said.
Ashwin added that Penang remains one of Malaysia’s top MICE destinations, recording 980 conferences as of August this year with an estimated economic impact of RM457 million. Last year, the state hosted more than 2,000 events.
