Malaysian hotel owners stall global foray

The owners and brands which have representation abroad continue to be the same players such as Holiday Villa Hotels & Resort, IGB Corp, Sunway, Berjaya, Genting Group and Impiana.

Kuala Lumpur: Over the past decade, there have been fewer number of new Malaysian hotel owners and operators expanding abroad.

With the exception of Tune Hotels, there are no new names venturing abroad and making a mark in a big way, said the President of the Malaysian Association of Hotel Owners (Maho) Datuk Seri Abdul Aziz Abdul Rahman.

He noted that the owners and brands which have representation abroad continue to be the same players such as Holiday Villa Hotels & Resort, IGB Corp Bhd, Sunway, Berjaya, Genting Group and Impiana.

For example, Holiday Villa owns/manages some 25 hotels here and abroad, while Sunway has hotels in Cambodia, Vietnam and China.
Meanwhile, Tune Hotels, which now has 10 hotels in Malaysia, Indonesia and the UK, has plans for 72 hotels overseas in the next five years.

Owning a hotel usually needs high capital expenditure but the returns could take even up to 10 years to recover, depending on the average room rate.

Abdul Aziz pointed out that growth can be deterred by the lack of connectivity into a destination.

He said that commercial decisions by airlines to cut destinations was not in the best interest of those who may have plans to expand.

Tune Hotel, he said, is a good example of how an airline plays an important role in a hotel operator's expansion.

Maho's executive director Shaharuddin M Saaid said that other factors which discourage brands from going abroad is the lack of confidence and expertise.

"Brand reputation and acceptance is vital for overseas operation which not many local hotel management companies have," he said, citing the need for a strong networking and customer base when venturing abroad

Shaharuddin feels local players would be more encouraged to move in the foreign realm, should there be an assurance or availability of attractive investment policies, financing facilities, high yield and good return on investment.

And it is rare, although not unheard of, for a player to move and build a brand abroad without first establishing a brand here. But, sometimes, growing in Malaysia too can be challenging.


Source : Business Times
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