HONG Kong-based hotelier and property developer Tan Sri David Chiu has been flying in and out of Malaysia so often that he is often mistaken for a Malaysian.
“On the plane coming in, the crew will say I do not need an immigration card. I tell them, I do need one. They think I am joking,” says Chiu who first came to Malaysia in the 1990s.
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Chiu in front of the soon-to-be opened May Tower project in Jalan Munshi Abdullah, KL |
The Far East group is one of the largest three- to four-star hoteliers in the former British colony. It currently has 10 hotels, seven of which are in operation and three to be opened within 24 months.
As the interview wore on, Chiu began to little by little slip into Malaysian shoes when asked about his plans to establish a hotel base here and in China now that he has a firm footing in his kampung, while Malaysian property and construction companies were seeking jobs overseas.
“We are doing different things. It is exciting to talk about overseas investments, but have they really done as well as they have in Malaysia? Many times we read of the successes, but among these there are failures we do not read about.
“Yes, the overall margins here are tough; the market is relatively mature. But we have a stable government and a large middle class. People like to compare salaries here with that of Hong Kong or Japan. It is not the absolute numbers (that matter) but the disposable income,” says Chiu who was here to check out Sabah’s hotel scene.
“Now that we are relatively strong in Hong Kong, we would like to establish a platform here and in China’s hotel industry. We will make some acquisitions in China’s major cities.
“After owning Dorsett in Jalan Imbi (with 320 rooms) some eight years here, we bought Sheraton Subang. We are operating Dorsett Penang, which we do not own. Come June-July, we will be opening May Tower serviced apartment and hotel in Jalan Munshi Abdullah, Kuala Lumpur. In August-September, we will be opening our Johor Baru hotel, which will have 320 rooms.
“With the Singapore casino opening, there will be some spillover. I have seen the impact of what happened to Macau. We all knew that Macau will prosper but it was beyond anyone’s expectation, including the government’s.”
Chiu says because rates are the cheapest in Asia, there is only one way to go. Up!
The new four-star May Tower hotel-cum-service apartment will be run along the Ascott model. It will have 200 rooms as a base and some of the units will be put on lease. Chiu expects rates of between RM180 and RM200 a night with 80% occupancy against the average 70% for hotels in the three- to four-star category.
Chiu says while his Hong Kong hotels will have a margin of 65% with their main focus on lodging and little food and beverage emphasis, his Malaysian investments have a margin of 50%, about 10 points higher than a five-star outfit.
China places a high emphasis on F & B outlets because people like to entertain in hotels. “I went to a hotel in Guangzhou where there are 60 VIP dining rooms. That is a lot of rooms. We are looking aggressively into buying hotels. We will not say no to resorts either. We are in a position to announce a few acquisitions in major Chinese cities soon.”
Chiu says the Hong Kong hospitality industry has a large Chinese tourist and businessman market. France and England also have a large tourism market but not here.
“Which is why the country is having this Visit Malaysia Year. Here, you have a big Indian and Middle East market. Malaysia may be friendly but Hong Kong work longer hours and have better discipline.”
Chiu came to Malaysia in the early 1990s. Tan Sri Chong Kok Lim, a tin miner from Perak who owned the Regent hotel (now Park Royal) and built Sungei Wang Complex brought him here and introduced him to developer Datuk Wong Kee Tat.
“Wong introduced me to a banker and I bought a bond at a deep discount, which I subsequently sold to buy some land in Sri Hartamas which I put together.”
Chiu set up Malaysia Land Properties Sdn Bhd (Mayland) which became active in 1994. He and his Shanghainese wife lived here 70% of their time to allow him to put together a team which grew from 17 to 180, excluding his hotel management staff, and increase his land bank.
Today, Plaza Damas has 1,300 units of serviced apartments and a few hundred units shophouses. Mayland will be adding several hundred units with its phase three, which is located across Hartamas Shopping Centre.
“There will be an evolution of the serviced apartment and condominium market. There will only be a demand on linked houses if people can accept a certain amount of travelling time to their work.
“Admittedly, Puchong has grown and the infrastructure is good but they will be bored if they have to take more than an hour to get to work. That is why in Hong Kong and London city property prices are shooting through the roof. The same will happen here, coupled with the fact that families are getting smaller and security has become very important.
“Developing property is not like a restaurant operation or making TV sets. Food is consumed and is gone. A TV is junked after some years. But a property remains. A developer is short sighted if he thinks he can build something and wash his hands off the project. There are many things I cannot control, but when it comes to building properties, we try our best,” says Chiu.
“We do not give guarantees but try to enhance the value of the property we develop. Beginning from day one, the location is the magic word. Next is the product. If you go to Port Dickson and buy a 3,000 sq ft property, you die. It is not a place where you stay 365 days. You must not be romantic when buying a property. A developer cannot enhance the value in that location. Is this a location for a two-room or a semi-detached? It is a judgement he has to make. Any developer who try to fool the customer is an idiot in the long run. I also believe that the early bird should make money. If a project is RM500 per sq feet (psf), I will start with RM400 psf. Let the early bird benefit. Today, those who bought early from us have made money. So a developer is not a restaurant operator or a maker of TV sets.
“But there is one thing I am sad about. Not only in Mayland, but with other developers here as well. There is a lot of room for improvement and quality control. I must say Malaysian contractors' discipline is not that great.
“I will be invited to go to the 8th floor. I say, ‘No need to see the 8th floor. I know it will be good. I want to see the 10th.’ To be fair, there are areas for improvement even with us. But generally, here, before contractors take the job, everything is boleh. When they get the job ... sigh!”
Chiu concludes: “I have the same problem in China when we started building. But they have improved a lot in several years. The quality gets better all the time but not here. There is very little improvement.”
Source : STAR
[tags : malaysiahotelnews hotels malaysia resorts news travel tourism travel vmy2007]
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