Hotel Industry in Malaysia Essay Example
Hotel Industry in Malaysia Essay Example

Hotel Industry in Malaysia Essay Example

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  • Pages: 5 (1149 words)
  • Published: August 26, 2016
  • Type: Essay
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Malaysia’s hospitality industry is experiencing healthy growth in hotel openings and hospitality-related services through the steady flow of business travelers, tourists and popularity as a MICE (Meeting, Incentives, Conventions, Exhibitions) venue. Malaysia’s advantage in this sector lies in good value in terms of costs compared to the rest of the region, its diversity of natural attractions such as beaches and mountains as well as solid infrastructure and amenities.

Table 1

Table 1 shows the supply trend of 3-5 star hotels and hotel rooms from 2011 to 2012. In terms of the number of rooms, Malaysia showed an increase of 1.1% from 193,340 rooms in 2011 to 195,445 rooms in 2012. In terms of total supply of number of hotels, there was an increase of 17 units of hotels in 2012 which is 0.6% higher from 2011. Demand for hotels

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and resorts in Malaysia are basicly from tourists including domestic and international. Tourism industry play a key role in the pace of hotel development in Malaysia.

Malaysia's hotel market maintained a reasonable performance with steady improvements in the tourism industry. Tourism industry in Malaysia continued to perform well on the back of an increasing number of promotional activities and Malaysia’s growing reputation as a dynamic and competitive shopping hub and host for global sporting events (such as Le Tour de Langkawi, F1 Grand Prix, PGA and LPGA Tours, ATP World Tour, EPL pre-season tours) and business/conference events. Malaysia will remain well positioned to retain its ranking among the global top 10 tourist arrivals and top 15 tourist receipts.

Table 2

Table 2 shows the number of Malaysia’s Tourist Arriva

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in 2011 and 2012. Generally, the total tourist arrivals to Malaysia were increasing annually. Malaysia’s number of tourists showed a tremendous increase of 318,384 from 2011 to 2012 which is 1.3%.

Table 3

Table 3 shows the average occupancy rate of hotels in Malaysia with steady increase and as of 2012 it stands at 62.4% which is 1.8% difference from 2011. Malaysian hotel sector is also displaying promising growth with a steady rise in hotel prices. According to Hotel Price Index (HPI), the average price paid for hotel room night in Malaysia during 2012 is RM368. The figure represents a 3% increase over 2011. All in all, Government’s policy in promoting Malaysia’s tourism and hospitality sector is going as planned, enough to be able to attract foreign investors to invest in hotel/industry sector.

Market Study of Hotel and Resort Sector in Johor Johor's transformation into the amusement and theme park capital of Malaysia calls for extra stream of hotels. With Johor Premium Outlet and Legoland are already opened, followed by Hello Kitty Town, Little Big Club and LAT theme parks, Johor hoping to capture sizeable share of the projected number of visitors (estimated additional 5.4 million annually) to be attracted by these tourist destinations. Before Iskandar Malaysia became a family destination, average occupancy rate for hotel in Johor was only at 59% and the average room rate were was hardly grew.

The transformation of Johor started to see hotels and resorts to fill more rooms. Over the next two years, hotels in Johor are expected to enjoy healthy levels of growth both in average occupancy rate and average room rate as

even more hotels open. Malaysian Association of Hotels (MAH) Johor Chapter stated that in 2013, the average occupancy rate will be 70%, which is 10% growth over 2012. Average room rate, meanwhile, are expected to be RM220 from RM200 in 2012. MAH hopes that the average occupancy rate will expand by 5% over 2013 and another 10% jump in forecast in 2015. Similar 5% and 10% growth of average room rate are anticipated in 2014 and 2015, respectively.

In terms of supply, a total of 40 new 3 star – 5 star hotels are scheduled for opening in Johor, with about half of the said number likely to be built in the next five years. The Government noted that Johor will further build 3,000 new rooms by 2014 alone. There are upcoming 4 star and 5 star hotels in Johor include St. Giles and Holiday Villa in Johor Bahru. The new products have really contributed to the increase in demand of hotels and resorts in Johor. Legoland has already surpassed its target mark of 1,000,000 visitors while Puteri Harbour Family Theme Park is on track to achieving its target of 500,000 visitors.

Newly confirmed additions are Legoland’s water theme park in Iskandar Malaysia, the Ocean Splash and Ocean Quest water parks in Desaru which are slated to open by year-end and 2015, repectively. These new theme park are reported to increase tourist spending by 25% and lengths of stay by a minimum of two nights. It appears that there are tendency for hotels and resorts in Johor to take 10 years to see a return on investment. It is due to the prospects

of Johor becoming Asia’s amusement park capital that seems promising.

Market Study of Proposed Development

Attractions of Kota Tinggi The proposed development which is an eco-resort (Kota Tinggi Eco Resort) are located in Mukim Kota Tinggi, District of Kota Tinggi, Johor. Kota Tinggi is a town in the state of Johor, located around 42 kilometers north-east of Johor Bahru. The demand for hotels and resorts in Kota Tinggi are highly affected by the tourism sector as Johor is regarded as an important gateway for Malaysia. It accounts for about half of the total number of tourist arrivals in Malaysia. Johor Tourism Council have done a lot of promotions to help boost the tourist arrivals. The promotions that target Singaporeans highlighted several interesting places in Johor including Kota Tinggi.

Being one of the most interesting places to visit in Johor is the reason why Johor Tourism Council located the tourist information centre in Kota Tinggi. Kota Tinggi has been indentified to have several pillars of tourism including ecotourism, agrotourism, culture, heritage, food, shopping, golf, islands, and beaches. The most populat tourist destination is the Kota Tinggi Waterfall. There are also many beaches along the coastal part of Kota Tinggi. The most popular beaches are Tanjung Balau, Desaru and Batu Layar. Teluk Sengat located east of Kota Tinggi town, is a popular seafood village among tourists, especially those from Singapore.

Target Market

The target market for the proposed development are divided into three groups. Firstly is the local people. Johor is one of the state in Malaysia which have the highest number of population. Johor’s population currently stands at 3,230,440 and in

Kota Tinggi itself currently holding 187,824 number of population. Secondly, the target market will be focusing on Singaporeans. Tourism Department of Johor has recorded that there are about 60% of the total tourist who visited Johor were Singaporeans.

And last but not least, the target market for the proposed development will be tourist from other country. Johor has recorded more than 12 million tourist arrivals last year, which is 5.7% higher compared to 2011. Tourist arrivals in Johor are expected to surge to unprecedented levels following newly-developed tourism products in Iskandar Malaysia. As the proposed development (Kota Tinggi Eco Resort) is family-oriented and suitable for all ages, it targets local people and tourist including families, couples, students, and also businessmen.

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