Boost for the hotel sector | The star

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Malaysia’s hospitality industry, which has been one of the hardest hit sectors during the pandemic, finally appears poised to begin its much-needed recovery.

Malaysian Hotel Association (MAH) Chairman Datuk N Subramaniam said the resumption of economic activities, the easing of Covid-related restrictions and the recent reopening of international borders will pave the way for the recovery of the hotel sector. local.

However, he points out that it may take up to a year for the hospitality industry to return to pre-pandemic levels.

“To be more realistic, it will take us up to a year to return to our pre-pandemic days.

“We’ll have to wait, if we want to see occupancy rates go back up to between 60% and 80%,” he told StarBizWeek.

In light of the recent Hari Raya holiday season and interstate travel allowance, Subramaniam says it’s mainly hotels outside the Klang Valley that have seen high occupancy rates.

“Hotels in the Klang Valley weren’t as full as most people returned to their hometowns.”

He adds that most international tourists entering Malaysia at present are mainly from countries in the region.

“At the moment we mainly see tourists from all over the region like Singapore and Thailand. Foreign travelers from Europe or other parts of the world have not yet returned in large numbers.

Additionally, Subramaniam says there is currently a shortage of workers in the service sector.

“Many have moved on to other industries over the past two years as a result of the pandemic.

“Additionally, raising the minimum wage to RM1,500 has also aggravated the situation. We understand that many hotels have requested foreign workers, but they have not yet received approval from the authorities.

CBRE President | WTW, Foo Gee Jen, said the reopening of international borders on April 1, 2020 will provide a positive outlook for the tourism sector and lead the tourism market to slowly regain momentum.

“Previously, there was an arrangement for a vaccinated traffic lane (VTL) between Malaysia and Singapore, and then subsequently Thailand and Cambodia.

“Industry players are optimistic about the reopening of borders which comes with an increased level of tourism operator confidence within the market.”

Quoting the MAH, Foo says hotel occupancy is expected to reach 60% in the third quarter of this year, driven mainly by international tourists.

“To support this arrangement, entry procedures have been relaxed compared to last year, which could increase demand for tourism products.

“Business travel as well as leisure spending at resorts in Langkawi and Melaka, among other getaway islands, will see a gradual increase in occupancy numbers as many have become less concerned about the statistics of Covid numbers -19 which initially created a mind blocks the very idea of ​​travel.

Rahim & Co in its Property Market Review 2021/2022 indicates that the Malaysian hospitality sector is expected to improve steadily in 2022, subject to continued management of the Covid-19 situation.

“As tourism was shut down for most of 2021, it wasn’t until October, when interstate travel was fully permitted, that hotels were able to reopen for business.”

During the travel restriction period, Rahim & Co notes that a few hotels were operating as quarantine accommodation facilities to supplement their operations, while others had to be permanently closed.

“After the lifting of restrictions on interstate travel, hotels and resorts have seen bookings soar, indicating that demand for domestic travel is still evident but is limited by pandemic-induced measures .”

Meanwhile, CBRE in its Kuala Lumpur (KL) Hotel Market Outlook and Outlook 2022 admits that KL’s hotel industry has faced the challenges posed by the pandemic.

“However, strong economic growth and the Malaysian government’s robust plan to reopen its borders to international travel and revitalize its tourism industry, coupled with improving fundamentals and notable infrastructure developments underway, are making the hotel market KL a prime candidate for investment in 2022 and beyond.”

According to CBRE, 2022 will see the opening of around seven key hotels comprising over 2,600 rooms in Kuala Lumpur.

Key hotels include Kempinski Hotel KL, Park Hyatt KL, Conrad KL, ParkRoyal Collection KL, Pan Pacific Serviced Suites KL, Amari KL and Fairmont KL.

CBRE adds that at least four other key hotels are expected to open between 2023 and 2025.

These will be SO Sofitel KL, Kimpton [email protected] Exchange, Edition KL Marriott and Jumeirah KL Hotel & Residences.

These four hotels alone are estimated to add an additional 1,260 rooms to the Kuala Lumpur hotel market, according to CBRE.

“Many key hotel openings have been delayed due to pandemic disruption. Much of the hotel pipeline targets luxury and high-end demand,” he says.

In 2021, hotel room supply in Kuala Lumpur consisted of economy (23%), midrange (19%), upper midrange (15%), upscale (22%) ), high-end (12%) and luxury (8%).

“Within three years, luxury and top-of-the-range will represent more than 60% of the total new supply.”

Additionally, CBRE notes that the return of travelers from Singapore is expected to drive the recovery of the Malaysian tourism market in 2022.

“The total number of tourist arrivals to Malaysia reached 26.1 million in 2019, registering a 1% year-on-year increase. The top five source markets for travelers to Malaysia in 2019 were Singapore, Indonesia, China, Thailand and Brunei.

CBRE adds that Southeast Asia remains Malaysia’s biggest contributor to tourism, accounting for 66% of total arrivals in 2019.

“Singapore has consistently been Malaysia’s top source market, accounting for an average of 46% of total arrivals between 2015 and 2019.

“Despite a decline in 2020, Singapore remained the top contributor with 1.5 million arrivals.”

CBRE reports that the total number of arrivals has dropped due to various travel restrictions, associated with the latest waves of Covid-19 in the region,

“Thailand became the top source market in 2021, accounting for 54% of total arrivals to Malaysia. Between January and September, Malaysia received around 4,000 daily arrivals from Thailand.

“The recovery of VTL with Singapore, the historical top source market, is expected to have a strong positive impact on the economic and tourism market recovery of Malaysia and Kuala Lumpur in 2022.”

Separately, CBRE says the emergence of the halal tourism industry will also provide a significant opportunity for the Kuala Lumpur hotel market.

“According to the MasterCard-CrescentRating Global Muslim Travel Index (GMTI) 2021, international Muslim travelers grew at a compound annual growth rate of 7.5% between 2013 and 2019.

“By 2023, this market is expected to recover up to 80% by 2019, which recorded 160 million arrivals.”

CBRE notes that Malaysia leads the 2021 GMTI as the best Muslim-friendly vacation destination for Muslim travelers, followed by Turkey, Saudi Arabia and Indonesia.

“As a Muslim-majority nation, Malaysia offers an abundance of prayer facilities, halal food and a Muslim-friendly atmosphere.

“The Ministry of Tourism, Arts and Culture has launched several initiatives, including the Islamic Tourism Center and the recognition of Muslim-friendly accommodation to demonstrate the country’s commitment and ability to capture this rapidly growing segment. and increasingly important in the global market”.

Peter M. Doran