Penang guesthouse operators are up in arms over what they described as “restrictive and costly” state government policies which may render their closure by the end of October.

The group’s spokesperson Steven Heong Chan Hoe expressed their disappointment at the state government for its handling of the problems faced by the industry.

They claimed that they are upset with the state government for its "continued refusal to acknowledge us as guesthouses, rather than hotels".

Currently, Penang has about 200 guesthouses with temporary operating permits.

“By the end of October this year, more than half, or about one hundred or more, will be forced to cease business because of state policies and guidelines," said Heong in a press conference held at Stewart Lane.

The strict restrictions imposed on guesthouses by the Penang Island City Council (MBPP) include a provisional license fee of RM3,600 for dormitory types and RM7,200 for big houses.

Guesthouses are also required to submit building plans and Heritage Impact Assessment reports to the authorities, but they complained about not being able to afford architects with heritage expertise.

“Their fees ranges from RM30,000 to RM50,000 depending on the size of the guesthouses.

“To many small guesthouse operators, the amount is too big and indeed a huge burden which we simply cannot afford,” Heong explained.

"Many of us, if not all, are unable to comply with the requirements and now run the risk of closure by the MBPP. Our reasons are valid and not without argument."

Also present at the press conference were 70  guesthouse operators, who carried placards to urge the state to extend its amnesty programme, which was conducted in 2014, to allow them to comply with the council's requirements.

On Sept 30, Local Government and Traffic Management committee chairperson Chow Kon Yeow warned that from Oct 1 onwards, all new hotels must be licensed before they start operations.

Failure to obtain licenses would put operators at risk of hefty fines or be in danger of their items seized by MBPP.