Kuala Lumpur will welcome more than 3,000 new hotel rooms and hotel suites this year

More than 3,000 new hotel rooms and hotel suites are set to open in Kuala Lumpur this year, according to the latest Kuala Lumpur Hotel Market Outlook & Prospects 2022 report by CBRE|WTW’s global joint venture partner, CBRE Asia Pacific.

Among them are the 232-room Park Hyatt Kuala Lumpur at PNB 118, the 544-room Conrad Kuala Lumpur (the former MAS headquarters on Jalan Sultan Ismail), the 535-room Parkroyal Collection Kuala Lumpur (and Pan Pacific Serviced Suites Kuala Lumpur), the 160-room Kempinski Hotel Kuala Lumpur, the 252-room Amari Kuala Lumpur, and the 690-room Fairmont Kuala Lumpur.

An additional 1,260 new hotel rooms will open between 2023 and 2025. They include the 471-room Kimpton Kuala Lumpur @ The Tun Razak Exchange, the 226-room So Sofitel Kuala Lumpur Hotel & Residence in Jalan Ampang, the 213-room Jumeirah Kuala Lumpur Hotel & Residences, and the 350-room Edition Kuala Lumpur.

Can these new hotels and hotel residences generate high revenues when they first open and in the years after that?

The Covid-19 crisis has had a significant impact on the global hospitality industry. Hotels, restaurants, casinos, golf resorts, entertainment centres, and sporting venues have been closed for more than a year as governments and public health officials work to stop the spread of the coronavirus. These businesses moved quickly to mitigate the impact on their operations, furloughing employees, cutting costs, and going digital, among other things, until they were given the go-ahead to reopen.

According to the Malaysian Association of Hotels (MAH), the industry lost revenues of more than RM10 billion in 2021, up from RM6.3 billion in 2020. During the Movement Control Order in 2020, the industry lost about RM300 million in revenue every two weeks.

After more than a year of the Covid-19 pandemic, Malaysia’s hard-hit hospitality industry saw at least 120 hotels close their doors, either temporarily or permanently, due to significant financial losses.

When all economic sectors were allowed to operate again at the end of last year, the hospitality sector regained its momentum.

At the moment, Malaysia’s international borders are only open to certain international business travellers and those who have applied under Singapore’s Vaccinated Travel Lane (VTL) arrangement, either by land to Johor Bahru or by air to Kuala Lumpur International Airport (KLIA).

The resumption of VTL with Singapore, Malaysia’s historically top source market, is expected to have a significant positive impact on the country’s and Kuala Lumpur’s economic and tourism market recovery in 2022.

Business picked up quickly after domestic travel resumed last year, according to a hotelier.

“I believe Malaysian hotels and resorts will be driven by domestic demand for at least another year, or until the global economy improves and there are no international travel restrictions. People prefer to travel within Malaysia for the time being because travelling abroad is inconvenient. Meanwhile, we can see that discretionary spending has suffered and that spending patterns have shifted. New routines and expectations have emerged. To weather the storm, both new and existing hotel players will need to consider all of these factors,” he said.