PETALING JAYA: Upscale hotels in Kuala Lumpur and its surrounding areas continue to see steady occupancy rates, despite a slight increase in average room prices, according to a property survey.
With the weaker ringgit seen as a welcome boost for the tourism industry, hotels in the city are expected to continue to attract new investments.
“With the extensive new supply of branded residence market, more new hotel entrants are expected,” CH Williams Talhar & Wong’s (WTW) said in a report on the sector.
The firm said occupancy rates remained stable particularly on upscale hotels.
“Room rates still have room to grow as Kuala Lumpur is relatively low compared with neighbouring countries.”
An estimated 27.44 million international tourists visited Malaysia during Visit Malaysia Year (VMY) 2014, up 6% compared with 2013.
“There was a slight drop on mainland Chinese tourist arrivals subsequent to the MH accidents.
“In the second half of 2014, occupancy remained at 70% and average room rate was RM267, up 4% compared with previous review period. This is mainly driven by increasing tourist arrivals after numerous promotional activities by Tourism Malaysia in VMY 2014,” it said.
It said upscale hotels remained stable and outperformed except for three-star hotels dropped to 61%, likely affected by the decline in mainland Chinese visitors.
“Average room rate increased 4% to RM267. Market observed marginal growth in room rate for most hotels due to increasing operation costs.”
Menawhile, WTW, in its property market report 2015, said hotel supply in the Klang Valley was 167 hotels (48,047 rooms) in 2014, up 6.2% compared with 2013.
“Up to 2018, there are 15 new hotel developments including 12 five-star hotels. The developments include St Regis, Harrods, Four Season Place and Fairmont Hotel.
“Fairmont Kuala Lumpur is expected to open in 2017 with 750 rooms. Moving into 2015, the weakening of Malaysian currency made the country appealing as a low-cost travel destination, which will spur the demand of hotel rooms,” the report pointed out.
*The Star