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Over 20 KL Hotels Claimed to Be Closing Due to Low Tourists Inbound and Airbnbs

A WhatsApp message claiming that 21 hotel establishments are going to close down has been widely circulated. A check on Facebook found that the same message has gone viral since January 15.

In the 21-list, two hotels are claimed to be closing down for renovation while the rest are either winding up or closing down for good. All of the hotels listed are part of the Kuala Lumpur skylines, with big names including Sheraton, W Hotel, Royale Bintang, and among others. Here is the message:

1) Swiss Garden Hotel – closing down March 31, 2019 for renovation
2) Royale Bintang Bukit Bintang – up for sale. Closing down March 31, 2019
3) W Hotel Kuala Lumpur – up for sale. Potential china buyer has been identified
4) Sheraton Petaling Jaya – up for sale
5) Grand Season Hotel – closed down
6) Holiday Inn Glenmarie – rumored may close too
7) KL Journal – up for sale
8) Pullman Putrajaya – closing down for renovation
9) Travelogue Hotel, 3 stars. aka Geo Hotel, 203 rooms, f/hold, RM130mio
10) Ibis Hotel, 3 stars, Jln Yap Kwan Seng, 684 rooms, 3 stars, Rm500 mio
11) Renaissance Hotel, 5 stars, 912 rooms, f/hold, RM1. 2 bill
12) Holiday Inn Express, 3.5stars, 386 rooms, f/hold, RM365 mio
13) G Tower, 5 stars, Jln Tun Razak, 32 storey commercial, f/hold, RM1. 2 bill
14) TRX 5 Stars Hotel, 4 stars, 480 rooms, 26 storeys, complete by end 2021, RM1. 25 mio per room key
15) Four Points by Sheraton, 4 stars, Jalan Petaling KL, 4 stars, f/hold, 318 rooms, opening in Apr 2019, RM 280 mio
16) Verdant Hill Hotel, 223 rooms, 4 stars, f/hold, 20 storeys, RM180 mio
17) Maya Hotel, Jln Ampang, 4 stars, boutique urban hotel, 207 rooms, f/hold, RM 235 mio
18) W Hotel, 5 stars, Jalan Ampang, 25 storeys hotel, 150 rooms, f/hold, USD 100 mio
19) Four Season Mall, high end mall, KL, 6 storeys, f/hold, Robinson Shopping Mall as anchor tenant, RM550 mio
20) Colonial Beach & Spa Resort, 4 stars, 176 rooms, f/hold, RM 55 mio
21) Hotel Sentral Group (10 properties)

Renaissance Hotel KL. Source: Marriott

For the people who are not familiar with the hotel industry, this may come as a shock. However, reports have contributed the drop of inbound tourists and the rise of alternative accommodations such as Airbnb as the reason to the downfall of the hotel industry − especially evident in 2018.

FeedMe Malaysia have run a check on the list and found that at least seven of them have been reported by the media.

Royale Chulan Bukit Bintang Hotel. Source: royale chulan

Singapore-based company Hotel Royal Ltd have offered RM197 million to acquire Royale Chulan Bukit Bintang Hotel. Malay Mail reported the deal was sealed yesterday (Feb 19) and the Boustead Hotels & Resorts Sdn Bhd will now focus on the only one hotel they own on Jalan Conlay, namely Royale Chulan Kuala Lumpur.

W Hotel KL. Source: Agoda

As for W Hotel, The Star reported that the hotel along Jalan Ampang will be sold at RM360 million or RM2.4 million per room. The 5-star hotel has 150 rooms which started operation in August 2018. However, in a follow-up report by EdgeProp, Tropicana Corp Bhd said they did not plan to sell W Hotel off, citing high occupancy as its cling onto business. Tropicana Corp Bhd was founded by Tan Sri Danny Tan Chee Sing, brother to Berjaya Group’s Tan Sri Vincent Tan.

Sheraton PJ. Source: tripadvisor

In May 2017, The Edge reported Sheraton PJ was up for a pirate sales amounting to RM350 million. After operating 20 years and once the tallest hotel establishment in KL, Grand Seasons Hotel will also close its door for good this February 28, citing severe building facilities rundown as a big challenge to keep the hotel running. The hotel is owned by Lim Siew Kim, a daughter of late Genting Bhd tycoon Tan Sri Lim Goh Tong.

Geo Hotel was sold for RM83 million in 2017, The Edge reported. It looks like it is going to be sold off again, according to the viral message. Last month’s news report revealed that Sentral Group will be letting go 10 hotels for a whooping RM625 million.

While we cannot ascertain the viral message claims entirely, FeedMe Malaysia has found seven of the claims are true.

Source: NST

In a report by The Edge, the shortcoming of the local hotel industry is no secret as Airbnb-like accommodations have outpaced the expansion in tourist arrivals. Coupled that with the increase of the minimum wage and electricity tariffs, many hotel establishments are scratching their heads on keeping account balance positive.

President of Malaysia Budget Hotel Associations Leong PK said the hotels’ golden years were 2008 to 2012. Since then, it has been downhill, Leong who represents 2,000 budget hotels revealed.

“Today, if we breakeven we are lucky,” said Leong, adding that many budget hotels are winding up now.

Tourism is Malaysia’s top revenue but lately, it has shown worrying signs of deterioration. According to Tourism Malaysia website, the total tourist arrivals have dropped 6.56 million, from 25,95 million in 2017 to 19.39 million last year.

The tourists are also spending fewer days when travelling here. In 2016, tourists accounted for an average of 5.9 nights stay in Malaysia; in 2017, it dropped to 5.7 nights.

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