Henry Butcher: Penang sees drop in tourist arrivals, consumer spending

PETALING JAYA (Sept 13): Despite the drop in tourist arrivals in 2015, Penang’s hotel segment continues to be healthy where hotels in the state reported an occupancy rate of up to 85% during peak season, according to Henry Butcher Malaysia (Penang) Sdn Bhd.

In its “Penang Real Estate Market: Opportunities despite weak sentiments” report for 2Q2016, the property consultancy firm stated that international tourist arrivals at Penang International Airport in 2015 was 683,897, a dip of 4.71% compared with 717,724 in 2014, citing data from the Penang Institute.

“The largest number of tourists was from Indonesia (268,892) followed by Singapore (144,581) while China (62,215) was the third contributor to the international tourist arrival.

“It was hoped that the extension of visa fee waiver until December 2016 could increase the number of Chinese tourist. There is a drop of 7.37% in the Chinese tourist arrivals in 2015 as compared to 2014,” said the report.

Commencing from March 1 to Dec 31, 2016, Chinese tourists can travel to Malaysia without a visa, subject to specific conditions such as a staying period of not more than 15 days.

According to the report, in 2015, there was a total of 6,347,618 hotel guests (3,467,719 local and 2,879,899 foreign) in Penang. This saw a drop of 7.3% from the 6,847,569 hotel guests recorded in 2014.

It noted that there is still a low supply of hotel rooms in Penang, despite the opening of properties such as St Giles Wembley (415 rooms), Olive Tree (250 rooms), G Kelawei (208 rooms), Citi Express (234 rooms) and other boutique hotels in 2015.

Among the new hotels expected to open its doors this year include Double Tree Resort (318 rooms), The Jazz Hotel (226 rooms), OZO George Town (132 rooms), The Rice Miller Hotel & Godowns (67 rooms) and Vouk Suites @ Mansion One (48 rooms).

Meanwhile, the state’s retail market saw a drop in consumer spending, affected by the country’s overall sluggish economy, weakening ringgit and rising inflation, according to Henry Butcher Penang.

“There is only a marginal increase of retail space in shopping complexes on Penang Island in 2Q2016. There is no new supply completed in Seberang Perai.

“The total retail space recorded on Penang Island and Seberang Perai is 11.42 million sq ft and 6.9 million on sq ft respectively,” said the firm.

Monthly rentals of retail space on the ground and lower ground floors of prime malls on Penang Island were between RM20 and RM40 psf while upper floors were priced between RM10 and RM18 psf, depending on the location and size of the retail outlets, added Henry Butcher Penang.

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