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City & Country: Klang Valley hospitality market grows in 1H2013

THE Klang Valley hospitality market performed reasonably well despite election jitters, thanks to a healthy growth in international tourist arrivals in the first six months of the year, says a report by Zerin Properties.

The report, entitled “1H2013 Hospitality Highlights — Klang Valley/Kuala Lumpur”, states that tourist arrivals in the first half of the year rose 7.9% to 12.5 million from 11.6 million in the previous corresponding period.

Singaporeans remained the main visitors, at 6.3 million, which translates into a growth of 7.9%, followed by Indonesia with 1.2 million (up 12.1%) and China with 943,756 (up 24.5%).

However, tourist arrivals from Thailand, India and New Zealand dropped 8.9%, 4.6% and 8.1% respectively, along with those from the Middle East.

Tourist receipts in 1H2013 increased 16.7%, generating RM15 billion compared with RM12.8 billion in 1H2012.

According to the report, the growth in Malaysia’s hospitality market was due to the government’s Visit Malaysia 2014 campaign launched earlier this year. The campaign offers various promotional packages and tours as part of the government’s initiative to promote Malaysia as a tourist destination and achieve arrivals of 28 million and receipts of RM75 billion.

Following the opening of two new hotels in the first quarter of the year, the total supply of hotel rooms in the Klang Valley grew to 41,495 as at June. The Aloft Hotel Kuala Lumpur Sentral contributed 484 rooms and the four-star Premiera Hotel in Jalan Tuanku Abdul Rahman, 90.

However, the closure of Crowne Plaza Mutiara Kuala Lumpur to make way for a new mixed-use development known as Tradewinds Centre removed 565 rooms from the market.

Out of the current total of 41,495 rooms, about 30,148 or 72.6% are located in Kuala Lumpur. The rest are located outside the city.

As at June, three, four and five-star hotel rooms in the Klang Valley stood at 9,412, 14,527 and 11,836 respectively.

According to the report, the growth in Malaysia’s hospitality market was due to the government’s Visit Malaysia 2014 campaign launched earlier this year.

New supply

Alila Hotels and Resorts Group recently announced its intention to open the Alila Bangsar Kuala Lumpur hotel, comprising 124 rooms, in early 2017 while KLCC (Holdings) Sdn Bhd plans a new hotel and commercial development on 3.9 acres between Suria KLCC and the Asy-Syakirin mosque in Jalan Pinang. The joint venture between KLCC Holdings and Qatari Investment Authority via QD Asia Pacific Ltd will comprise a 76-storey hotel, serviced apartments, residences and associated facilities, including a 64-storey office building, 6-storey retail podium and basement car park. The development is expected to be completed by the end of 2017.

Zerin’s report further states that hotel occupancy rates were slightly affected in 1H2013 by uncertainties over when the 13th general election would be held.

The three and four-star hotels in the Klang Valley saw occupancy of 65.67% and 65% respectively, dipping from 70% and 66.7% in 2H2012 and 67.84% and 67% from the previous corresponding period.

The occupancy rate of the five-star segment improved slightly to 70.5% from 70% in 2H2012 and 68.4% in 1H2012.

The average room rate (ARR) for five-star hotels in the Klang Valley was at RM355 in 1H2013, slightly higher than in 1H2012 (RM344) and 2H2012 (RM346).

The ARR of four-star hotels increased to RM229 from RM224 in 1H2012, but declined slightly from RM237 in 2H2012. For three-star hotels, the ARR was at RM162 in 1H2013, up from RM153 in 1H2012 and RM160 in 2H2012.


As at June, the total supply of three to five-star hotel rooms in Kuala Lumpur stood at 24,158, of which 7,373 or 30.5% were five-star. The total supply of five-star hotel rooms in Kuala Lumpur declined from 7,983 due to the closure of Crown Plaza Mutiara Kuala Lumpur in 1H2013.

The occupancy of five-star hotels in Kuala Lumpur in 1H2013 declined slightly to 77.5% from 78% in 2H2012, but increased from 76% in 1H2012. Both the three and four-star segments recorded a slight decline in occupancy in 1H2013 compared with the first and second halves of 2012.

In 1H2013, the occupancy of three-star hotels in Kuala Lumpur stood at 66% while that of four-star hotels was 67%. By comparison, it was 70% and 71% in 2H2012 and 68% and 69% in 1H2012 respectively.

The ARR of three, four and five-star hotels in Kuala Lumpur during the period under review was RM171, RM232 and RM382 respectively. For five and three-star hotels, this was roughly the same as in 2H2012, but higher than in 1H2012. The ARR of four-star hotels dropped from those in the first and second halves of 2012.

In 2H2012, the ARR of three, four and five-star hotels was RM170, RM251 and RM382 respectively. For four-star hotels, this was down about 7.6% from 2H2012 while for the three and five-star hotels, it was about the same as in 1H2013.

The ARR for three, four and five-star rooms in 1H2012 was RM161, RM235 and RM376 respectively.

The total supply of budget hotel rooms in Kuala Lumpur stood at 5,990 in 1H2013 and there were no new completions during the period under review. The occupancy of such hotels declined slightly to 58% from 62% in 2H2012 and 59% in 1H2012.

Their ARR was around RM100 in 1H2013, similar to that recorded in the first and second halves of 2012.

At present, there are 31 serviced apartment buildings with a total of 5,627 units in Kuala Lumpur following the completion of Lanson Place Bukit Ceylon with 150 units and One-Stop Serviced Residence in Jalan Metro Pudu 2 with 209 units completed in 2011.

A number of serviced apartment projects are in the pipeline in the Klang Valley, including the 34-storey Camellia Serviced Suites with 240 units (end of 2013), Ascott Serviced Residences at KL Sentral with 143 units (1Q2014), D’Pulze Cyberjaya with 232 units (2014) and Somerset Damansara Uptown, Petaling Jaya with 200 units (2016).

In 1H2013, the occupancy of serviced apartments in Kuala Lumpur declined slightly to 70.4% from 73% in 2H2012, but increased from 70% in 1H2012. Their ARR in 1H2013 stood at RM289, up from RM287 in 2H2012 and RM280 in 1H2012. However, Ascott Kuala Lumpur recorded an ARR of RM510 and Garden Residences RM449.

According to Zerin’s report, the Klang Valley hospitality market is likely to see stronger growth in 2H2013 due to the anticipated entry of branded hotels in the near future, for example St Regis in 2014, The Regent in 2015, Four Seasons Place Kuala Lumpur and W Kuala Lumpur in 2016, and continuous efforts to promote Malaysia as prime tourist destination under the Visit Malaysia 2014 campaign.


This article first appeared in The Edge Malaysia Weekly, on November 18, 2013.

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