MAH president Datin Christina Toh.- Photo courtesy of Malaysian Association of Hotels
PETALING JAYA: The Malaysian hotel sector is on track to navigate a path towards recovery, mirroring the broader travel and tourism industry.
Malaysian Association of Hotels president Datin Christina Toh said hotels in most states have benefited from the pick-up in international tourist arrivals.
“Hotels located within city centres, especially those in the Klang Valley, have been seeing good occupancy rates.
“It’s not quite pre-pandemic levels yet, where the overall average occupancy rate was around 70%,” she told StarBiz.
The average occupancy rate for hotels is around the mid-60% range.
“Hotels in the city centres have improved tremendously. It’s almost pre-pandemic. However, some smaller states have not hit that level yet.”
From July to August, three to five-star hotels within the Kuala Lumpur city centre have seen their occupancy rates shoot up to more than 80%.
“It’s the summer holidays and these hotels have been benefiting from both international tourists and investors,” she said.
According to Toh, the pick-up in tourist arrivals into the country can also be attributed to the easing of visa restrictions for travellers from India and China.
“As such, there has been greater awareness among Indian and Chinese tourists and a lot of popular destinations have been getting good traction,” she said.
According to Tourism Malaysia, some 537,000 tourists from India visited Malaysia between January and June this year, an increase of 51.6% from the 354,000 in the same period in 2019.
Currently, Indian nationals can enjoy visa-free entry into Malaysia for up to 30 days.
The policy, implemented since Dec 1 last year, will be in effect until Dec 31 this year.
As of June, Singaporeans topped the list of tourist arrivals, followed by Indonesians and Chinese.
Meanwhile, tourism expenditure in Malaysia has already surpassed pre-pandemic levels.
The total amount of tourism receipts rose from RM41.69bil in January to June 2019 to RM45.42bil in the same period this year, according to data from Tourism Malaysia.
Knight Frank, in its real estate highlights report for the first half of 2024, pointed out that the number of four-star and five-star hotels in the city stands at 102 buildings, totaling 33,377 rooms.
It said hotel developments are traditionally concentrated in the city centre, with only approximately 25% situated in the KL Fringe.
“New hotel openings were generally put on hold since 2020 due to construction delays, lockdowns and the overall impact of the Covid-19 pandemic.
“However, activities gradually picked up as the country transitioned to the endemic phase,” it said.
Knight Frank noted that the first half of 2024 saw the arrival of the five-star Imperial Lexis along Jalan Kia Peng.
Another opening is Courtyard by Marriott Kuala Lumpur South.
The 278-key hotel is part of an integrated development known as Bloomsvale@OKR by Kerjaya Prospek Property Bhd
.
Looking ahead, Knight Frank said the remainder of the year is expected to see the completion of four additional hotels with a combined total of 1,138 rooms, all managed by internationally renowned brands.
They include Park Hyatt Kuala Lumpur, Marriott Executive Apartments, Courtyard by Marriott at Bloomsvale and Holiday Inn Kuala Lumpur at Menara Alfa Bangsar.
“It is forecast that the hotel inventory will expand by an additional 15%, to 38,200 rooms, with around 10 hotels boasting 3,727 rooms expected to be completed in 2025.”
The rising inventory will have an impact on the overall occupancy rates of hotels.
“It is, nevertheless, a good sign that more hotels are opening.”
Last week, Marriott International Inc revealed that it planned to open 20 hotels across Malaysia in the next five to 10 years.
This, the hotel group pointed out, is in line with its goal to expand its brand in the region.
“It shows that investors see potential by investing in Malaysia,” said Toh.
She emphasised that more needs to be done to attract tourists and investors into the country.
“We just need to market it well,” she said.
According to Knight Frank, the hospitality market in Penang is experiencing tremendous interest from more international hotel brands that are planning to open in the next few years.
“They include Le Meridien, Westin, a second Marriott Hotel at Queens Waterfront, Ascott and Park Royal Hotel along Gurney Drive.
“The confidence of these international brands coming to Penang post-pandemic, combined with the resumption of direct local and international flights to major cities such as Doha, Dubai, Xiamen, Hong Kong and Medan, as well as the implementation of a reciprocal visa-free policy between China and Malaysia for up to 30 days, will bode well for the state’s tourism sector.”
Additionally, Knight Frank said the increase in the number of international cruises arriving in Penang is expected to benefit the tourism industry tremendously, not only in Penang but throughout the country, leading into Visit Malaysia Year 2026.
“Similarly, hotel occupancy rates in Sabah are projected to improve in line with the increase in visitor arrivals, particularly for four-star and five-star hotels.
“The state’s hospitality sector continues to garner interest from foreign investors, which could lead to more new developments.”
While a full recovery to pre-pandemic levels might not be immediate, Knight Frank pointed out that the combination of government initiatives and a focus on high-yield markets would creates a fertile ground for growth.
“The influx of luxury hotels necessitates strategic adaptation from existing players,” it said.
“Overall, cautious optimism prevails as the industry navigates its path back to pre-pandemic levels,” Knight Frank pointed out.
