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Impiana Group seeks to double assets

MALAYSIAN hospitality group Impiana Group is looking to add more hotels to its current portfolio of five in Malaysia and three in Thailand. It owns or partly owns six of the eight hotels, including Impiana KLCC Hotel in Jalan Pinang, Kuala Lumpur, Impiana Hotel Ipoh in Ipoh, and Impiana Private Villas Kata Noi and Impiana Resort Patong, both in Phuket, Thailand.

The group is in discussions to acquire or manage a few new hotels and expects to make an announcement within the next three to six months, says Francis Chung, its executive director for corporate strategies and hotel operations.

"The new hotels could be as close as Indonesia and Cambodia and as far off as the Middle East. We are currently in talks with certain parties, with some in the final stages of negotiations," he says.

The group's total assets are currently worth almost RM500 million and it is looking at doubling its asset base by 2017.

"We have been rather conservative over the last few years. However, we see this year and next as a period for growth and expansion. We are looking beyond Malaysia and Thailand to grow our brand, either via acquisitions or from a hospitality management agreement basis, in other words, managing it as operators," says Chung.

The group also plans to introduce its second four-star hotel brand after Impiana by early next year, he adds.

"Impiana is a contemporary brand concept with a blend of modern and local tastes. Our Impiana hotel concept exudes a warm, rustic, and simple yet elegant feel. We even have our signature aroma. The target market is between 30 and 50 years of age, hence the new four-star brand will target the younger generation.

"It will be a technology-driven, modern and straightforward brand targeted at those in their 20s to 30s who are now starting to travel. Their needs are different … they need to be connected at all times. The information technology-based brand will include e-check-in, as well as smart services. For instance, at a touch of a button, our customers can order meals or pre-order their meals. It will be a completely wired [Internet protocol-based] hotel," he says.

While he was not able to reveal the name, Chung says the first hotel under the new brand will be in a major city in Malaysia.

The Impiana Group was established in 1994 by its chairman Datuk Seri Ismail Farouk Abdullah, starting with a hotel in Subang, which has since been sold.

Ismail is group chairman of KAB Group, which owns the Impiana Group. The KAB Group consists of Impiana Hotels and Resorts Management Sdn Bhd (IHRM), Rimbunan Raya Sdn Bhd and Institut Teknologi Perak (ITP). IHRM manages the hotels and resorts while Rimbunan Raya is a boutique property developer with a focus on high-end developments in Ipoh as the founder has strong ties with Perak. ITP is a private college. All three entities have common shareholders. Ismail has also been a director of Shangri-La Hotels (M) Bhd since 1979.

Chung says location is a major factor in deciding whether to acquire or manage a hotel. "All our properties are in strategic locations — that is number one. Secondly, the management team is also important, for instance, the ability of the owner to understand what needs to be improved.

"Impiana is not just a management company as we are owners too. We find this one of our biggest advantages when dealing with prospective hotel owners. We look at it from both sides. Returns are top on our minds and we don't simply spend unnecessarily. We are very prudent in our spending."

In July this year, the group inked a hospitality management contract with Semarak Murni Sdn Bhd to operate Impiana Hotel Melaka, a city resort hotel under construction in Klebang, Melaka. The 15-storey W-shaped hotel, due for a soft opening at end-2015, will offer 253 sea-view rooms. "It's being built on reclaimed land and Klebang is the next hottest spot in Melaka. It is a resort within a city and all the rooms oversee the Straits of Melaka," Chung says.

Apart from that, the group recently created the Premiera brand for Mara Inc Sdn Bhd, a unit of Majlis Amanah Rakyat (Mara), which owns Menara Mara, located next to Maju Junction on Jalan Tuanku Abdul Rahman in Kuala Lumpur. Menara Mara is being converted into a four-star hotel known as Premiera Hotel, which is expected to open with 90 rooms in 1Q2013, with plans to expand to 200 rooms in the next two years.

Impiana Group will operate the "halal-compliant hotel" or Islamic-sensitive hotel with an emphasis on Islamic values and the needs of its Muslim guests (such as halal amenities, prayer mats, and so on).

Under the management agreement, Impiana will operate the hotel for 10 years with an options to renew. The hotel will offer more than 10 meeting rooms and a pillarless ballroom that can accommodate up to 1,000 guests.

At its 14.5-acre Impiana Hotel Cherating in Pahang, Chung says the group may build private villas or chalets in the future. "We have the space to expand but nothing is firmed up yet. Some may not be aware but the hotel, with 104 sea-view facing rooms, actually shares the same 1.5km white sandy beach as Club Med Cherating," he says.

Over at Impiana KLCC, the extension or second phase of the hotel was completed a few months ago. The extension added 188 rooms — mostly club rooms and a business lounge — at the new wing to the existing 335 rooms.

Chung says Impiana KLCC, which is majority-owned by Petronas with Impiana as a minor shareholder, is the only hotel in Kuala Lumpur directly connected to the fully air-conditioned elevated pedestrian skybridge that connects KLCC with Bukit Bintang. The walkway was officially opened in January.

Hospitality market

"Hospitality is a growing market and an economic driver for Malaysia and the region as tourism is a very big sector. Occupancy at our hotels in Thailand are at an all-time high as the country has always been a favourite holiday destination, especially for Europeans. We are expecting further growth," says Chung.

"With next year being Visit Malaysia Year, I believe more tourists will be coming to Malaysia as well."

Malaysia recorded 24.7 million international tourist arrivals last year with receipts amounting to RM58.3 billion, according to Tourism Malaysia.

"There is still a long way to go in branding Malaysia as a destination. If one thinks of resorts, Thailand and Bali would come to mind first. We have a lot of beautiful resorts and beaches here but we still lack the branding.

"The other is, of course, connectivity. I think this has been improved tremendously by AirAsia and other budget carriers, which has really bridged that gap.

"I also feel the service culture is lacking in Malaysia. If you look at how the Balinese treat their guests or look at Thai hospitality, their warmth and hospitality are part of their culture. For Malaysia, it is just part of the job. The attitude of the hospitality service employees here has to improve. I think it is not just about training but also via exposure to how others treat their guests," he says.

At Impiana, selected employees undergo training via exchange programmes between hotels under the group in Malaysia and Thailand. The group also owns the five-star Swasana Spa in Impiana KLCC.

Property development

In Ipoh, there are plans to build a 13-storey serviced apartment project, called Impiana Residences, next to the Impiana Hotel Ipoh (previously the Casuarina Hotel) in Jalan Raja Dr Nazrin Shah, right in the heart of the city. Residents will be able to enjoy the hotel facilities as well.

Upon completion, the project — to be developed by sister company Rimbunan Raya — will be managed by the group.

The development will offer 194 units, with sizes ranging from 500 sq ft (studio) to 1,500 sq ft, with an indicative price of RM400,000 to RM450,000. The RM90 million project sits on a four-acre leasehold tract, which includes a one-acre water body comprising a swimming pool and a water landscape feature.

Rimbunan Raya is also the developer of The Enclave high-end residential project in Ipoh.

This story first appeared in The Edge weekly edition of Nov 26-Dec 2, 2012.

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