The Sabah Association of Tour and Travel Agents (Satta) expresses serious concern over the State Government’s recent announcement of an electricity tariff increase of about 15 per cent, effective February 1, 2026.
The decision will have a significant and far-reaching impact on the tourism industry and small and medium enterprises (SMEs) across Sabah.
At a time when the cost of living has already risen sharply over the past few years, the increase in electricity tariffs will further escalate operating costs for businesses.
In the tourism sector, electricity is a major component of hotel operating expenses. Higher electricity bills will inevitably translate into higher room rates, affecting both hotels and short-term accommodation providers throughout Sabah.
The ripple effect will extend to restaurants, cafés and kedai kopi, many of which will be forced to raise prices to offset higher overheads.
As electricity is a fundamental input for all businesses, including factories and manufacturing operators, the tariff hike will place additional pressure across the wider business ecosystem.
Compounding the issue is the ongoing problem of electricity disruptions, which Sabah has experienced for several years.
An unstable power supply has already caused losses, disrupted business hours, affected food quality and reduced overall sales, while fixed overhead costs remain unchanged.
Many SME operators are struggling to survive under these conditions.
In light of these challenges, the announcement of an electricity tariff increase at this juncture is akin to adding salt to the wound.
Rather than easing the burden on businesses and consumers, the move risks further undermining economic recovery and investor confidence in Sabah.
Satta urges the state government to reconsider the decision and prioritise measures that help lower the cost of living and stabilise electricity supply.
“We also hope the government will engage meaningfully with industry stakeholders and allow businesses across all sectors the breathing space they need to sustain operations and continue contributing to Sabah’s economy,” Satta said in a statement.
