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MAHB faces hiccup in hotel business

Kuala Lumpur: Malaysia Airports Holdings Bhd (MAHB) faces a temporary hiccup in its airport hotel business following a termination of a joint-venture agreement (JVA) between its wholly owned subsidiary, KL Airport Hotel Sdn Bhd (KLAH), and Atoz Hospitality Services Sdn Bhd.

The airport operator said in a filing with Bursa Malaysia yesterday that the JVA, inked last December, was for the purpose of setting up a private limited JV company to operate and manage a new airport hotel brand known as Sama-Sama Hospitality Group.

There are two sub-brands under the Sama-Sama Hospitality Group, Sama-Sama Hotel and Sama-Sama Express.  KLAH has a 51% equity in the JV company, Sama-Sama Hospitality Management Sdn Bhd (SSHM), while Atoz owns the rest. “The JV has faced issues due to the non-participation and withdrawal of a key individual in the management and operations of the JV Company,” said MAHB.

The airport operator said the non-participation and withdrawal have resulted in KLAH issuing a notice of termination of the hotel management agreement (HMA) to SSHM on Sept 3.  As the HMA has been terminated, KLAH issued a notice to terminate the JVA to Atoz on Sept 18.

MAHB said the termination of the JVA will not affect the management and operations of Sama-Sama Hotels as necessary measures have been taken to ensure there will be no disruptions once the termination takes effect.

The launch of the Sama-Sama brand marked MAHB’s entry into the airport hotel sector as the airport operator sets to derive more income from the non-aeronautical segment, which accounts for 50% of its total revenue currently.

MAHB will not only own but also operate the five-star full-service Sama-Sama KL International Airport hotel adjacent to KLIA as well as the existing transit hotel located  at the satellite building of KLIA.

The transit hotel will be rebranded as Sama-Sama Express KLIA. With the completion of klia2, MAHB will also operate its transit hotel which will be called Sama-Sama Express klia2.

 

This article first appeared in The Edge Financial Daily, on September 19, 2013.

 

 

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