Rooms start to fill up in Malaysian hotels - Brief Article - Statistical Data Included

Business Asia, May 19, 2000

The hotel industry in Kuala Lumpur has been cheered by first-quarter figures showing average occupancy rates have risen to between 65 and 70 per cent.

A report by the National Property Information Centre (NAPIC) reveals positive news for the city's hotels, which have suffered significantly since the onset of the Asian financial crisis in 1997.

During the darker days of that period, occupancy rates at some leading hotels fell below 30 per cent.

The 1999 Property Market Report released in March found that the occupancy rate in Kuala Lumpur had declined to 49.2 per cent in 1999 from 56.5 per cent in 1998.

However, NAPIC's new Hotel Stock Report for the first quarter indicates that occupancy rates for Kuala Lumpur hotels rated three-star and above ranged between 65 and 70 per cent.

Of the 53 hotels in Kuala Lumpur surveyed, only two recorded occupancy levels below 40 per cent.

Elsewhere in the country, the highest occupancy rates were in areas favoured by tourists, such as Penang and Langkawi. Hotels in these areas recorded occupancy levels as high as 95 per cent, the NAPIC report showed.

Despite the good news, the market remains tough.

Competition is likely to remain fierce, and a price and sales war is expected to eat into profits. Most of the four- and five-star hotels in Kuala Lumpur, Penang and Johor Baharu offered discounts as high as 50 per cent off the published room rates to improve business during the first quarter of this year.

The Mahathir Government is addressing the hotel sector's problems by lobbying for international events.

Kuala Lumpur is also planning to position itself as a MICE (Meeting, Incentive, Convention and Exhibition) centre.

--Asia Pulse