Monday, August 24, 2009

Hotel occupancy hit by downturn, A(H1N1)

However, players say second half showing signs of improvement

PETALING JAYA: The global economic recession and threat of Influenza A(H1N1) have affected the country’s hotel occupancy, according to the Malaysian Association of Hotel Owners (MAHO).

It found most hotels reported about 20% decline in business in the first half of the year compared with the same period last year despite higher tourist arrivals during the duration, as reported by Tourism Malaysia on its website.

The higher tourist arrivals could partly be attributed to the temporary shut down of the Bangkok airport due to protests in April, which diverted the traffic to Malaysia, making the country a stopover point before travellers proceeded to their final destination.

Meanwhile, arrivals from certain countries have shown a significant decline (see chart).

“Britain and many countries discouraged their residents from going for holiday overseas and promoted more domestic travel due to the global economic crisis. With A(H1N1), many more people, especially the Japanese who are very health concious, will refrain from travelling overseas,” MAHO told StarBiz.

Parkroyal Kuala Lumpur area director of sales and marketing Albert Stienissen said the hotel saw about 10% drop in occupancy for Middle Eastern tourists in July and August from the year before but more arrivals from Gulf Cooperation Council markets like Bahrain, Iran, Oman, Qatar and Jordan.

There were also fewer travellers from Japan, Taiwan and China in the first half year but the numbers had recovered since July, he told StarBiz.

Prince Hotel & Residence Kuala Lumpur general manager Lyndon Discombe said the hotel experienced a drop in occupancy from the Japan and Taiwan markets while the China segment showed growth.

It had been able to secure more business from alternative markets like India, Singapore and Hong Kong. In contrast to the tourist arrivals trend, Saudi Arabia showed a healthy increase in room occupancy last month versus July 2008, he said.

“Earlier in the recession, we experienced a significant drop in corporate and meeting operations. Corporations have reduced, and in some instances, cancelled travel and meetings, while some changed from external venues to conducting meetings and training in-house,” Discombe added.

Hilton Kuala Lumpur general manager William Costley said the A(H1N1) outbreak led the Japanese government to caution citizens to avoid outbound travel as much as possible and that had significantly affected all countries with regards to the Japanese market.

Outbound tourism, nonetheless, has affected all countries, and not only those in Asia. For example, Britain has also seen a large increase in domestic travel. The hotel’s strategy is to target other key Asian destinations such as Singapore, Hong Kong and Australia.

“Our hotel has never really depended on the Middle East market in the summer months. We only receive overflow bookings when the hotels in the Golden Triangle are all fully booked,” he said.

The impact of the global recession “appears drastic” as 2007 and 2008 were record years for the hotel industry, Costley said. “If we compare our performance against 2006, the business is still performing very well and Malaysia has been less affected compared with some neighbouring countries,” he added.

Hotel Nikko Kuala Lumpur director of communications Katie Hoo said while people tended to adopt “a wait and see” attitude, it did not mean they had cancelled all travelling plans. “If there’s a need to travel due to work, people will still travel,” she said.

On the upside, the trend seems to be changing in the second half year with the occupancy level for July and August showing improvement.

Hoo said the hotel recorded improvement both in terms of room occupancy and number of meetings in July while August looked set to be a busy month.

“Having said that, we expect September to slow down a fair bit due to the Ramadan period,” she added. Hilton KL, meanwhile, has July and August as the best months of the year.

“We achieved almost 85% occupancy for July and expect occupancy to average 90% until the start of Ramadan, when business generally declines,” said Costley, adding that bookings for September to December looked similar to last year’s, when business started to decline from September.

Parkroyal Kuala Lumpur saw July and August’s average occupancy rate rise 3% year-on-year, with notable improvement among the domestic and regional sectors.

Growth was likely to continue for the rest of the year thanks to airlines’ low-fare promotions and the hotel’s tactical offers over several channels, said Stienissen.

Discombe of Prince Hotel said while July and August were still not at the same levels as the corresponding period last year, it had started to see more individual and group leisure travel, as well as improvement in corporate guests and meetings.

Source : STAR
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