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HOTEL Yearbook
FORESIGHT AND INNOVATION IN THE GLOBAL HOTEL INDUSTRY

2014

The CEOs of Six Senses and The Brgenstock Collection discuss the luxury resort of the future Wimberly Interiors present a stunning 7-page portfolio of hotel design trends The 2014 hotel outlook around the world: 45 country reports from Horwath HTL Our trend spotters on asset management, sustainability, digital marketing, tourism and revenue management in 2014 Industry observations from our academic partners Cornell, Lausanne, Hong Kong Polytechnic and ESSEC

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COUNTRY REPORT
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At Horwath HTL, we focus one hundred percent on hotels, tourism and leisure. With over two hundred and fifty professionals world wide, our network can draw on a tremendous amount of international experience and local knowledge that gives us, and our clients, a unique advantage. We offer a broad range of advisory solutions that covers the whole cycle of the hotel product, starting with planning and development, on to asset management and operational advice, to transactional and financial restructuring. At any stage, Horwath HTL will add value to your project and ensure that you receive the very best support every step of the way. www.horwathhtl.com

Sen Soon-Mun is Director of Horwath HTL in Kuala Lumpur. Since joining the company in 2002, he has been involved in many hotel market and financial feasibility studies across Asia, including China, Thailand, Sri Lanka and Malaysia. Malaysia has been his main focus since 2004. Prior to joining Horwath HTL, Sen worked for Mandarin Oriental Hotel Group in Business Development, and for PKF Consulting Ltd / PriceWaterhouseCoopers Consultants Ltd. Sen started his hospitality career in 1994 with Shangri-La International Management as an Internal Auditor.

MALAYSIA
2013 SNAPSHOT Kuala Lumpur is still the favorite destination for hotel investment. However, other locations such as Penang, Langkawi, Kota Kinabalu and Johor Baru are attracting a lot of interest from local and international developers and investors. In 2013, a number of international brands have signed up properties in some of these locations: Courtyard by Marriott and OZO in Penang; Ritz Carlton and St. Regis in Langkawi Hilton, Four Points by Sheraton, Mercure and Marriott in Kota Kinabalu; and Hilton and Amari in Johor Baru. The Kuala Lumpur city-wide average occupancy level (AOL) for 2012 was approximately 70%. The AOL is not expected to change significantly in 2013. To further enhance tourism on Langkawi, a Five-Year Tourism Development Master Plan was launched in 2013 with a budget allocation of RM 420 million. Tourist arrivals up to September 2013 grew by 3.3% over the same period in 2012, to 18.8 million. The official target of 26 million for the year is expected to be achieved. RM 1.2 billion has been allocated by the government for operating and development expenditure in 2013 and 2014 to implement Visit Malaysia Year 2014 (VMY 2014) programs. In an effort to target more high spending tourists, the government approved under the 2012 budget an Investment Tax Allowance and Pioneer Status for new hotels with 4- and 5-star ratings. Hotels which are 100% foreign-owned also qualify for these tax incentives. 2014 AND BEYOND VMY 2014 is the 4th Visit Malaysia Year. The last VMY was 2007 and it registered arrivals over 21 million, an increase of approximately 20% over 2006. Recently, The Lonely Planet

by Sen Soon-Mun

listed Malaysia as one of the top 10 countries to visit in 2014, the only country in Asia in the top 10 list. The government has set a target of 28 million foreign arrivals for 2014, representing an increase of approximately 8% over 2013s target. With the opening of the new low-cost carrier airport, KLIA 2 in May 2014, the target could be achieved. VMY 2014 is expected to provide additional demand to the hotel markets across the country where the mid- and low-tier hotels (mainly 4-star and below) will benefit most. The AOL for the country is expected to register within the range of 68 to 70%, an increase of 4 to 6 percentage points from 2013. The AOL for the overall hotel market in Kuala Lumpur is still expected to be the highest in the country, within the 72 to 74% range. But the projected increase in demand may not necessary entail significant average room rate (ADR) growth. The ADR is expected to grow at between 3 and 5% in the mid- and low-tier category, to RM 368 RM 372, and RM 252 RM 258, respectively. In the top-tier category, however, we do not expect much growth in AOL and ADR in 2014 as they are projected at 73 to 74% and RM 505 RM 510 range, respectively. Kuala Lumpur is seeing a number of top-tier hotel developments currently: St Regis (2015), W (2016), The RuMa (2016), Banyan Tree (2016), Alila (2017) and Four Seasons (2018). The top-tier hotel market is not expected to register ADR growth rates exceeding 5% until these top-tier hotels open. Langkawi, whose hotel market has the highest ADR in the country, will see a couple of new premium luxury brands entering the market by 2015. The Ritz Carlton and St Regis are under construction, and more premium luxury brands are scouting for hotel sites or are in the midst of management contract negotiations. The ADR of the top-tier hotels exceeded RM 900 in 2012, while those in the next lower tier were just below RM 500. Over the last 5 years, the AOL across the market has remained relatively unchanged at between 58 and 61%. The demand levels and the ADR are not expected to change much in 2013 and 2014. However, with the openings of the Ritz Carlton and St Regis in 2015, the demand and ADR of the top-tier hotels could see some significant movements as the premium luxury market enlarges after years of domination by the Four Seasons and The Datai.

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HOTEL Yearbook
FORESIGHT AND INNOVATION IN THE GLOBAL HOTEL INDUSTRY

2014

The CEOs of Six Senses and The Brgenstock Collection discuss the luxury resort of the future ESPAs Sue Harmsworth on the coming changes in the global hotel spa industry The 2014 hotel outlook around the world: 45 country reports from Horwath HTL Our trend spotters on asset management, sustainability, digital marketing, tourism and revenue management in 2014 Industry observations from our academic partners Cornell, Lausanne, Hong Kong Polytechnic and ESSEC

This e-publication may be ordered online | 19.50

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