Luxury Hotel brands set to raise Malaysia's profile

Kuala Lumpur is on the shopping list of luxury brands in the likes of Four Seasons, St Regis and now Raffles - a welcome move for Malaysia to rid itself of the cheap destination tag.

The presence of these regal brands will help raise Malaysia's profile, improve service standards and room rates. With the exception of possibly Langkawi, Malaysia is touted to have one of the world's lowest hotel room rates.

As market leaders, these prestigious hotels position themselves at a certain level which enables other hotels to follow suit and lift the bar for hotel rates.

"They help push room rates higher, which will be difficult to do without them ... and they help improve yield," Malaysian Association of Hotels (MAH) president Datuk Mohd Ilyas Zainol Abidin told Business Times.

Four Seasons Resort Langkawi's presence on the island, Mohd Ilyas said, helped to set a standard and boost the average room rate (ARR) of hotels there.

IIyas reckons that rates could be hiked by at least a quarter compared with current rates by five-star hotels of around US$120 (RM434) per night. This provides the opportunity for other hotels to up their rates by between 10 per cent and 15 per cent.

Based on the hotel data from MIHR Consulting Sdn Bhd, Kuala Lumpur's rate leader is Mandarin Oriental, with an ARR of over RM600. Almost all other five-star hotels are below RM500 per night.

It has been a tough journey for Malaysian hoteliers since the 1997 crisis, as it took them seven years to start raising rates to current levels.

Hotels here are adopting a slightly different approach this global crisis, they do not plan to cut rates. Once rates fall, it is hard to raise them. Instead, rates are maintained by value adding. Perks like breakfast, free Internet service, drop-offs and pick-ups are thrown in.

Mohd Ilyas added that big brands in Malaysia will bring in a new kind of business into the market. "It positions Malaysia differently," he said. Service will be at par with the premium they charge and the people employed are of a different caliber, he said.

Developer of Four Seasons Place in Kuala Lumpur Tan Sri Syed Yusof Syed Nasir is looking to net a 30 per cent higher ARR than the city-wide ARR when it opens in 2012. "Four Seasons is a rate leader, the rate could be about RM800 per night," said Syed Yusof, who is chairman of Venus Assets Sdn Bhd, the hotel developer.

Meanwhile, the 200-room St. Regis Kuala Lumpur, a Starwood Hotels & Resorts brand, is expected to open at KL Sentral in 2014. The owner, One IFC Sdn Bhd, were quoted as saying that it believes Kuala Lumpur is ready for the luxury brand.

As for Raffles Hotels & Resorts, sources say that its opening could be as early as 2011. And what other high-end hotel brands will Malaysia like to welcome?

Mohd Ilyas would love to see brands like Amanresorts, Banyan Tree and Bvlgari Hotels and Resorts as they cater to niche markets.

Source : Business Times Online
[tags : malaysiahotelnews hotels malaysia resorts news travel tourism travel vmy2008]

Hotel Sector high on Investors’ Radar Screen

FOREIGN groups are coming in greater numbers to acquire hotels in Malaysia, especially in the Klang Valley, to take advantage of the good value and expected strong growth in the industry.

Last year, a whopping 85% of the value of hotel transactions in the country was by foreigners compared with 44% in 2005.

»I think we are going to see a consolidation of hotel ownership« PREVINDRAN SINGHE

Foreign investments in hotels grew by 64% last year with foreigners, including regional chain players, hotel funds, foreign investment funds and individuals, making up 42% of the ownership of 4- and 5-star hotels in Kuala Lumpur now.

According to Zerin Properties chief executive officer Previndran Singhe, the growing interest among foreigners in the hotel sector was triggered by the strong growth in the tourism sector and the economy.

Generally the foreign investors were from the region and the Middle East, he said, adding that there was also a growing interest from investors in Singapore, Thailand and Europe and American funds and hotel chains.

“The advent of low-cost carriers and the strong tourism drive may create an insatiable appetite for hotels,” Previndran told StarBiz.

In the past few years, Zerin Properties has concluded a number of hotel transactions within and outside the country for foreign groups.

“We are basically hotel dealmakers in the region. We are in the midst of concluding a sale in Indochina and selling a resort in the Philippines, and has been appointed by a Middle East fund to negotiate the purchase of hotels in the region.”

Previndran said Zerin was also involved in hotel sales in Vietnam, the Philippines, Indonesia, Australia and other emerging markets.

As the exclusive agent for the asset disposal programme of the Sheraton Chain of Hotels in Malaysia, it concluded the sale of the 207-room Sheraton Perdana in Langkawi for RM77.5mil and the 267-room Sheraton Kuantan for RM36.6mil in 2005.

It was also involved in the sale of the 149-room Merlin Johor Baru for RM10.46mil and the 66-room Merlin Inn in Cameron Highlands for RM13.5mil.

Last year, the 100-room Grand Centerpoint in Kuala Lumpur was sold for RM12.5mil, and the latest deal was the sale of the 91-room Four Seasons in Langkawi for RM435mil.

The 452-room Westin Kuala Lumpur was sold for RM455mil in 2006, or a whopping RM1mil a room

“Malaysia has some of the finest hotels in the region and the growing number of foreign brands and players is adding a new dimension to the local hospitality sector.

“The hotels here are on par with other international markets and the local industry is leading in terms of product innovation through products such as The Datai, Hilton Batang Ai and Tune Hotel.

“New hotels coming in with truly leading designs include Maya Hotel and KL Hilton, which are niche in their market positioning and are market leading,” Previndran said.

Renovation work to spruce up some of the leading existing hotels such as Shangri-La Kuala Lumpur, Sheraton Imperial and The Regent is also underway.

With the tourism drive, average room rates (ARR) for 5-star hotels have moved up by at least 20% over the past two years while other categories of hotels have recorded an ARR increase of to 5% 10%.

Hotel occupancy rates in the Klang Valley have also increased from the mid-60's two years ago to about 70% now.

In August, 4- and 5-star hotels recorded an average occupancy rate of 86% while the average room rate climbed to RM361 from below RM300 previously.

“Moving forward, I think we are going to see a consolidation of hotel ownership – from fragmented ownership to chain ownership, and maybe even a hospitality-based real estate investment trust (REIT) like the Starwood REIT in the US.

“These consolidated owners will be locals and foreigners from the region who are already chain owners. There is also a strong Middle Eastern interest coming into the market, mainly in the premium properties,” Previndran said.

He said more top class brands, such as Conrad and Intercontinental, were expected to come into the market in the near future.

“On the other end of the spectrum, more chain-based limited service hotels in the likes of Ibis, Formula 1 and Holiday Inn Express will also be making its presence felt. I also see interest in resort locations picking up tremendously.”

Around the region, Previndran said Vietnam was experiencing a boom in the hotel industry due to shortage of good hotels.

“We see strong opportunities in the Vietnamese cities and resorts for premium and limited service hotels.

“The Philippines is also a good market as the population base is big and its islands are truly a big attraction for the Korean and Japanese markets.

“Australia is also another strong market, with Sydney being the most visited city in the Asia-Pacific.”

Source : STAR
[tags : malaysiahotelnews hotels malaysia resorts news travel tourism travel vmy2007]

Four Seasons Langkawi to sell for RM483 Million

THE 34-villa Four Seasons Residences in Langkawi, which will be built on the land adjacent to Four Seasons Resort, could fetch as much as US$140 million (RM483 million) once ready, says real estate agent Zerin Properties.

Four Seasons Resort Langkawi, recently acquired by a company controlled by Saudi Arabian Prince Alwaleed Bin Talal Bin AbdulAziz AlSaud, plans to initially spend some US$35 million (RM120.8 million) to add 34 villas and offer them for sale.

"Each unit could fetch between three and four times its cost of construction. The product is exclusive. Langkawi has a good profile internationally and the existing product has good returns," Zerin Properties chief executive officer Previndran Singhe said.

Zerin Properties was instrumental in bringing in Prince Alwaleed to make his first investment in Malaysia.

Kingdom Langkawi BV, a company affiliated to the Arab Prince, expects the expansion to be completed in the fourth quarter of 2008.

The acquisition was made through a joint-venture company which is 90 per cent owned by Kingdom Hotels Investments (KHI) and 10 per cent by European Hotels Corp Ltd.

"KHI intends to expand the resort by adding an additional 20 keys and developing 14 luxury villas that will be sold as Four Seasons Residences," KHI said in a statement.

The purchaser paid RM400 million for the hotel portion and RM35 million for another 10ha of land.

According to Previndran, the size of the smaller units may be around 1,000 sq ft and the larger luxury units about 3,000 sq ft.

"The entire development has to blend with the existing beach villas, existing environmental impact assessment and the existing architecture of the place," Previndran told Business Times.

The deal made history last month, when "Malaysia's most expensive hotel" in terms of average room rate (ARR) and cost per room, was sold at RM4.4 million per room (not including the 10ha of land).

The villas to be built, Previndran said, would be beach-front villas and mangrove villas.

"KHI is trying to emulate the residences concept which proved to be a success in Four Seasons Private Residences Marrakech in Morocco," he said.

"KHI's acquisition is its fourth venture in Asia. It follows the acquisition of a land lease for development of a Raffles resort near Da Nang (Vietnam) in January 2007, the Movenpick Karon Beach Resort in 2006 and land acquisition in Phang Nga, Thailand, earlier this year.

The 91-villa five-star Four Seasons Hotel was previously owned by Malaysian Airline System Bhd.

Source : Hotels
[tags : malaysiahotelnews hotels malaysia resorts news travel tourism travel vmy2007]

Tycoon Ong Beng Seng Gets to Build first Four Seasons Hotel in KL

KUALA LUMPUR: Singapore tycoon Ong Beng Seng, who owns Four Seasons resorts in Bali, Singapore and the Maldives, won government approval to build the brand's first hotel in Kuala Lumpur after a 17-month wait.

Ong would partner a sultan and CapitaLand Ltd to build the RM1.5bil hotel and apartment complex in Kuala Lumpur, Venus Assets Sdn Bhd executive director S.A. Raju said. Venus is owned by Ong, the controlling shareholder of Singapore-based Hotel Properties Ltd.

The project, next to the Petronas Twin Towers, marks the biggest investment in Malaysia's hospitality industry this year.

“Never under-estimate the power of the brand,'' said Joyce L. C. Chang, the principal of C-Hospitality Consulting Sdn Bhd. The Four Seasons is an “international name with prestige, and this is very good for Malaysia's tourism industry.''

Ong's two-tower project has been revised with the initial 72-storey condominium reduced to 60 floors, while the hotel tower remains at 38 stories, Raju said last week.

“We got approval from city hall in December and we are inviting tenders for piling works,'' he said. The revised plan “doesn't change the plot ratio of the project''.

The Four Seasons development would include 200 hotel rooms, 50 serviced apartments, and 173 condominium units, he said.

Ong bought the 2.6-acre site in 2003 from the late Singapore billionaire Khoo Teck Puat for RM90mil, or RM785 per sq ft. The development, through Venus, would be the fifth Four Seasons property for Ong. His Hotel Properties owns four of the brand's hotels.

Hotel Properties is also building a Hard Rock hotel at a beach in Negri Sembilan, and another in Penang. The new hotels will add to the company's five other properties in Malaysia, including three under the Concorde brand.

Venus, the owner and developer of the hotel project, is owned by Ong and his associates. Its chairman is Syed Yusof Nasir, who handles the business interests of Selangor's Sultan Sharafuddin Idris Shah.

Occupancy at the 900 hotels in and around Kuala Lumpur may rise to 72% this year, boosting average room rates to a record RM250 a day, said Ivo Nekvapil, vice-president of the Malaysian Association of Hotels.

Source : STAR
[tags : malaysiahotelnews hotels malaysia resorts news travel tourism travel vmy2007]

Kingdom Hotel buys Four Seasons Hotel in Malaysia for USD 114.2 Million

Hotel and resort investment company Kingdom Hotel Investments said it has bought the Four Seasons Hotel in Langkawi, Malaysia, for 114.2 mln usd.

The company said it plans to spend 35 mln usd expanding the 91-suite resort, with work expected to be completed in the fourth quarter of 2008.

---

MAS to sell Four Seasons Langkawi to Saudi prince

MALAYSIAN Airlines System Bhd (MAS) is selling the two-year-old Four Seasons Resort in Langkawi to a company controlled by a Saudi Arabian prince for RM435 million.

MAS yesterday signed an agreement to sell "Malaysia's most expensive hotel" in terms of average room rate (ARR) and cost per room to Kingdom Langkawi BV, a company affiliated to Prince Alwaleed Bin Talal Bin AbdulAziz AlSaud.

This is Prince Alwaleed's first investment in Malaysia. A sum of RM400 million was agreed for the hotel portion and RM35 million for another 10ha of land.

MAS will gain RM62 million from the sale after taking into account its net assets of RM365.08 million and incidental expenses related to the disposal amounting to RM7.9 million, it said in a statement to Bursa Malaysia.

The sale forms part of MAS's strategic asset rationalisation exercise through the disposal of non-core assets under its Business Turnaround Plan.

The disposal of the building and land measuring 35.64ha is expected to be completed by the third quarter of 2007.

Kingdom is an indirect wholly-owned subsidiary of Kingdom Hotel Investments. The Kingdom Group's principal activity is investment in hotels and resorts comprising development, acquisition, financing and actively managing hotel assets in key city and resort destinations.

The five-star Four Seasons opened in 2005 with MAS then projecting it will recover its investment in the property in about 15 years.

The hotel has a total of 91 villas, each costing an estimated RM4.97 million.

The resort hotel is wholly-owned by MAS subsidiary, MAS Hotels & Boutiques Sdn Bhd. The hotel, managed by Four Seasons Hotels and Resorts, is located on a 19.4ha at Jalan Tanjung Rhu, Langkawi.

It was reported that MAS bought the land for RM80 million.

Sources told Business Times that the hotel enjoyed an average occupancy of 68 per cent in 2006 and charged an average room rate of RM1,900. It made a net profit of RM20 million last year.

According to the hotel's website, the current going rate for a standard room is US$495 or RM1,734 a night.

All 91 villa have patios and a sea view. Twenty units are one- bedroom beachfront villas, each featuring its own spa room.

Last year, MAS completed the sale of the MAS building at Jalan Sultan Ismail for RM194 million.

On Monday, the national carrier announced that for the full year ended December 31 2006, it posted a net loss of RM133.74 million, some 80 per cent lower than its initial forecast of a RM620 million net loss.

Source : Hotels BusinessTimes
[tags : malaysiahotelnews hotels malaysia resorts news travel tourism travel vmy2007]

Why are Bill Gates and a Saudi Prince buying Four Seasons Hotels now?

Another milestone has been laid. The Board of Directors of Four Seasons Hotels Inc. — a public company — has formally accepted a $3.4 billion ($82 per share) purchase offer surfaced on November 6, 2006 by a group of investors whose principals include Bill Gates, the Prince, and Isadore Sharpe, CEO of Four Seasons. It's a fascinating deal! But what does it really mean?

The transaction

Now only shareholder approval, expected in April 2007, stands between the investors and their completed acquisition of Four Seasons Hotels Inc. of Toronto, Canada. Two thirds of the shareholders must approve the transaction. After three months of deliberations, the Board of Directors approved the buy out offer which will take the company private. The deal’s total value is $3.8 billion, including debt assumed. The purchase price represents a 28% premium to the closing price of Four Seasons shares on the day before the offer was announced last November.

The buyers, acting through investment vehicles, include Bill Gates, Chairman of Microsoft Corp., investing through Cascade Investment LLC, Saudi Prince Alwaleed Bin Talal Bin Abdulaziz Alsaud acting through Kingdom Hotels International of Saudi Arabia and, and Four Seasons Chairman and CEO Isadore Sharpe and his family. Bill Gates and The Prince are two of the richest men in the world — both billionaires.

At the time the buyout proposal was first made public on November 6, 2006, The Prince owned a 23% stake in Four Seasons, and Bill Gates’ Cascade Investment owned a little over 8%. The Sharp family's Triples Holdings owned about 65% of the voting rights in Four Seasons through a multi-class stock structure established when The Prince made a major investment in the company about 15 years ago.

On consummation of the deal, Sharp will receive $289 million under a 1989 incentive plan. Sharp, age 75, and his family will retain at least a 10% interest in Four Seasons, and Sharp will remain chairman and CEO.

Four Seasons manages 74 luxury hotels in 31 countries and has 25 hotels under development. It was founded in 1978 by Isadore Sharp and his family.

Putting the Four Seasons deal in context of recent transactions

The acquisition a luxury hotel chain by the world's richest man, Microsoft's Bill Gates, teaming with a Saudi prince in a transaction approaching $4 billion in value is interesting in itself. Prince Alwaleed has long shown a penchant for brands such as Citibank, Disney, and Fairmont. In fact, after rescuing Citibank in the banking and savings-and-loan disaster of the 1980s, some say the Prince rescued Four Seasons with his timely investment in the first round. In any event, his continued appetite for lodging investment has been demonstrated by his purchase of Fairmont in partnership with Colony Capital for an estimated $3.9 million (including debt assumption) in January 2006.

But the focus of billionaires and smart money on the lodging industry is nothing new. We have seen the likes of Ty Warner and Michael Dell acquire major luxury properties (a number of which have been Four Seasons hotels, by the way). And, at www.hotellawblog.com , we have talked about a number of other events or transactions that create a context that may be important to discerning the greater meaning of individual transactions such at the Four Seasons buyout. Some of these recent items include:

How Paul Allen , Bill Gates' Microsoft cofounder, has gotten into hotel mixed-use in a big way Miami Heat basketball star and NBA champion Shaquille O'Neal has invested in a $1 billion hotel mixed-use project in Miami

Former NBA Champ Earvin “Magic” Johnson has backed a $1 billion Atlanta hotel mixed-use development with hotel, residential and retail components to revitalize three blocks of Atlanta’s midtown area

Andre Agassi and Stefanie Graf , recently finalized a deal to develop a luxury, mountain, all-season resort project, Fairmont Tamarack, at Tamarack Resort in Donnelly Idaho, and are teaming up with Exclusive Resorts—owned by former AOL founder Steve Case — to build Agassi-Graf Tennis and Fitness Centers will be built at a number of the Exclusive Resorts sites

And of course the major investment of Steve Case, founder of AOL, in Exclusive Resorts and Miraval Living is another major deal all in itself (more on that soon).

Barry Sternlicht’s Starwood Capital launch of “1” Hotel and Residences , and the $500 million bet in India, and launch into China

CNL sale for $6 billion to Morgan Stanley and Ashford Hospitality Trust

">Blackstone’s purchases of Extended Stay America, Wyndham, La Quinta, MeriStar and of course, the non-lodging purchase of EOP

Sure, the quantity and magnitude of the deals has led many to think that “the whole lodging industry is on the block” and certainly, as I have written, Size no longer matters . . . at least in the hotel industry

What does it all mean? Why is this significant? What conclusions can we draw?

When I look at the cumulative transactions described above, I don't see just ego gratification of rich celebrities. I see a common focus of a lot of very smart money on the lodging industry, and I draw these possible conclusions:

Brands. Brands are very valuable — particularly in the lodging industry. Brands are hard to establish and take a lot of time and money to develop, so there are big barriers to creating new brands.

Luxury. The luxury segment of the lodging industry is likely to be a great place for the near, medium and long term horizon. There are greater barriers to entry, and bigger gains in RevPAR and profits ahead.

Hotel mixed-use. This term will become the password to success in the next decade. It refers to mixed-use projects where the hotel component is the keystone to creating and enhancing value. But successful projects will not just plop hotels next to or on top of residential or retail elements. Integration and complimentary uses must be optimized with people who understand the hotel and other uses of real estate involved. (That is the focus of our Hotel Developers Conference .)

Lodging industry prospects. The lodging industry prospects are excellent for the near and medium term. The fundamentals are all in place. I know it is popular to say, “It cannot continue to be this good much longer,” but I disagree. And the smart money agrees with me. So be alert, but relax. It is OK to harvest the good times too!

Consolidation. A few years ago at JMBM’s Meet the Money® , Lawrence Geller gave a keynote address. Although partially tongue in check, in classic “Gellerian” style, Lawrence predicted that in the coming decade (which is probably about now), there would only be three giant hotel companies! We may be closer to that now than anyone would have dared to think at the time. And the industry is likely to get smaller before it gets bigger.

There are some interesting implications here to ponder. . . .

Source : eHotelier
[tags : malaysiahotelnews hotels malaysia resorts news travel tourism travel vmy2007]

Hotel Industry Apprenticeship Scheme (HIAS) Stepping Stone to the Hospitality Industry

An edge to hospitality industry
BY TAN EE LOO

LIKE most of her peers, Zamsuzliana Ahmad did not know what to do after completing her secondary school education. When she spotted an advertisement in the newspaper on the Hotel Industry Apprenticeship Scheme (HIAS) programme for school leavers, she decided to give it a go and signed up for the programme.

Little did she know that that move would shape her career path and change her life forever.

Zamsuzliana was one of the students in the apprenticeship scheme organised by Taylor’s College School of Hospitality and Tourism (TCHT) in the late 1990s.

She has since moved on to become the sales manager of Dorsett Regency Hotel in Kuala Lumpur after gaining experience at various hotels.

Recalling her early years of learning the ropes as an apprentice, Zamsuzliana says the programme is a stepping-stone to enter the industry.

“You will not know if you are suited for it unless you try. That was what I said to myself when I finished school. Although my parents did not approve of my decision at first, they gave me time to prove myself,” says Zamsuzliana, 28.

Jointly offered by the Ministry of Youth and Sports and the Human Resources Development Fund, HIAS is a short, yet rigorous programme that provides school leavers with an opportunity to further their studies.

TCHT has trained more than 1,047 apprentices for over 78 hotels nationwide since 1997.
The duration of the programme ranges from ten to 24 weeks.

Successful applicants will be given free education, personal insurance and a monthly allowance of up to RM410. They will also be given a minimum one-year employment at participating hotels.
TCHT chief operating officer Pradeep Nair says the HIAS programme is specially designed for those who are interested in the hospitality industry but have no opportunity to further their studies due to financial difficulties.

“Our campus is equipped with facilities that mirror the real working environment and the programme is taught by full-time lecturers who have lots of industry experience,” he adds.
Students can choose from one of four modules such as accommodation practice (housekeeping), reception techniques (front office), food and beverage service and kitchen practice.

They will be awarded the Sijil Kemahiran Malaysia Levels One and Two by the National Vocational Training Council upon successful completion of the programme.

Participating hotels for next January’s intake include Sheraton Subang Hotel & Towers, JW Marriot, Dynasty Hotel Kuala Lumpur and Four Seasons Resort Langkawi.

Interested candidates can attend a walk-in interview on Dec 19, from 9.30am to 4pm, at Taylor’s College School of Hospitality and Tourism at Block C, Leisure Commerce Square, Jalan PJS 8/9, Petaling Jaya.

Applicants should apply with PMR or SPM qualifications (with a pass in English and Mathematics). For more information, call 03-7877 9777.

Source : STAR
[tags : malaysiahotelnews hotels malaysia resorts news]