• 16 December 2018
What’s Cooking in Malaysia’s Hotel Market?

What’s Cooking in Malaysia’s Hotel Market?

Malaysia currently ranks second for tourist arrivals among Southeast Asian nations, with Thailand easily taking the top spot. It hasn’t always been this way – five years ago, tourist numbers for the two countries were neck-and-neck, but since then Thailand has surged ahead, increasing from 24 million to 35 million visitors annually, while Malaysia has flatlined, or even gone into a slight decline. Visitor spending in Malaysia is currently up, however, and tourism revenues are at an all-time high. Meanwhile, the weak ringgit ensures that visits to the country have been competitively priced during the past three years, with no immediate changes in the currency’s fortunes anticipated.

Within the tourism sector there are reasons for optimism and causes for concern. The economy continues to show growth in the region of 5% but in recent months this has begun to fall short of earlier forecasts. Furthermore, almost half the country’s tourist arrivals are from Singapore, and as Malaysia’s own tourist authorities will admit, it is far from certain that all of these are genuine tourists. More positively, tourism revenues are up to 66 billion ringgit at the latest count, and amount to almost 5% of GDP. Meanwhile, the number of hotel guests rose by 6.8% during the past year to exceed 77 million.

Accordingly, a number of developers and operators have seen fit to expand their activities in Malaysia to take advantage of the current economic climate, with Minor Group and Onyx Hospitality leading the way with their respective AVANI and Amari brands.

AVANI Hotels and Resorts has announced expansion into Malaysia through an agreement with KTI Property Sdn. Bhd. to manage an AVANI hotel in Kota Kinabalu, the capital of Sabah in Malaysian Borneo. The coastal city of Kota Kinabalu,or KK as it is locally known, offers a cosmopolitan mix of cultures and is also an important gateway for some of the world’s best island-hopping with nearby Manukan Island, Mamutik Island, Gaya Island, Sulug Island, and Sapi Island. Nearby is the highest peak in Southeast Asia, Mount Kinabalu, a UNESCO World Heritage site. The Kinabalu National Park, of which the mountain is a part, is home to unique native wildlife such as the orangutan and sun bear.

As a newly built property, the AVANI Kota Kinabalu is scheduled to launch in the fourth quarter of 2021, and is situated within 20 minutes of Kota Kinabalu International Airport, which offers direct international flights to Singapore, Hong Kong, and China, as well as a host of domestic links across Malaysia. Located on Jalan Lintas, the hotel is set to be part of a mixed-use development with retail, office, and condominium components as well as a wide range of entertainment and dining options for guests.

The AVANI Kota Kinabalu adds 378 new rooms to the business and leisure markets, and will offer trademark AVANI sleep satisfaction, contemporary living spaces, and Honest Food. With all-day dining and a rooftop pool and bar, the hotel will make an ideal venue for conferences and other social gatherings.

Following recent additions in China, Sri Lanka, and Laos, Onyx has also set its sights on Malaysia, signing agreements with SP Setia Berhad, Malaysia’s leading property developer, to launch two new Amari hotels in Kuala Lumpur and Penang to follow up the success of the 242-key Amari Johor Bahru which opened in 2017.

The 252-room Amari Kuala Lumpur will be developed as part of KL Eco City – a landmark integrated mixed-use green development created by Los Angeles based architectural and urban design firm The Jerde Partnership. The property will enjoy direct access to corporate office buildings, residential towers, a retail mall, and an integrated rail hub with inter-city and inter-state rail connections, and is scheduled to open in early 2021.

Meanwhile, Amari Penang will offer 453 rooms in a tower directly linked to Setia SPICE, the world’s first hybrid solar powered convention center. The complex also incorporates a 10,000-seat events arena, aquatic and sports center, and a lifestyle and retail village. Perfectly situated for a wide range of attractions, the hotel will appeal to both business and leisure travelers and is slated for opening in late 2020.

Douglas Martell, President and Chief Executive Officer of Onyx was proud to announce the introduction of the Amari brand to these two premium gateway locations, and noted that the company was “continuing our commitment to this market with the upcoming opening of OZO and Shama properties in Iskandar, Johor, as well as an OZO hotel in Penang’s Georgetown.” He added that “we look forward to a long and successful partnership with SP Setia for Amari Kuala Lumpur and Amari Penang, and to having three of our core Onyx brands present across some of the most popular business and leisure travel destinations in Peninsular Malaysia.”

Dato’ Khor Chap Jen, President and Chief Executive Officer of SP Setia Berhad, commented that “Setia has grown leaps and bounds in the property development sector, and the need for having hotels is a natural progression for SP Setia Bhd Group as we grow from developing townships and expand into integrated developments.”

“When we first started looking for a hotel operator, we knew we would engage with a brand that is not only well-positioned in the market but one that exudes class and quality. Originally from Thailand and expanding rapidly across Asia, Amari is the flagship brand of Onyx Hospitality Group with a rich and long-standing heritage of over 52 years, and we are confident that the brand will add value to our developments,” he explained.

While Malaysia is a new market for Onyx, the Bangkok-based company has already established a growing regional portfolio of close to 50 operating properties across three core brands in eight countries. With a further 30 new properties in the pipeline for markets such as Vietnam, Indonesia, and Australia, the current target is to have 99 hotels open by 2024 as part of the goal to become the best medium-sized hospitality player in the region.

Given the dynamic role played by Malaysia as a key tourism and business destination, it is no surprise that the country is now a significant component of the regional expansion for Thailand’s leading operators.

About Author

Graeme Kay

Graeme Kay

Graeme Kay is a British mathematician and writer who has been based in Bangkok for over fifteen years. He has also worked in Japan, Serbia and Poland and enjoys travelling extensively. He studied Tra
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