Commercial & Industrial Property News Update

Malaysia - Penang Hotels To Enjoy Higher Occupancy In H2 2012

September 19, 2012

The Malaysian Association of Hotels (MAH, Penang) predicts a slight increase of 2% in hotel occupancy rate in Penang this year.

"The hotel occupancy rate in Penang is expected to hit 70% this year, 2% higher than 2011's average of 68%," said MAH.

The Association also said that the softer corporate market in US and Europe will result in lowered occupancy in George Town's business hotel segment, but the new tourism markets of Iran, China and India will likely boost tourism arrivals and pull up the overall occupancy rate in Penang for the second half of the year.

MAH Penang Chapter Chairperson Mary Ann Harris said that the new arrivals will consist largely of leisure tourists, as inbound business travel is expected to be muted owing to the economic woes of US and Europe.

"Australia, UK, and the Middle East markets will continue to drive the growth of tourism in the state," she said.

"So far the direct flight from Guilin, China by Firefly to Penang has improved tourist arrivals from China for Penang," she noted.

Commenting on the negative impact on Penang's business travel segment, Harris said, "The hotels in George Town registered an occupancy rate of 64% for the period of January to July 2012, compared with 65% a year ago corresponding period, due to the economic uncertainties in the United States and Europe."

Until July 2012, the occupancy rate for beach hotel, which cater mostly to the leisure market, achieved was around 62.74% compared with 60.9% in the same period last year.

"Fortunately, the diversion of the corporate market to Penang from Bangkok in the first quarter due to the floods there cushioned the impact of the slower business arrivals over here."

She added that 60% of arrivals year would be domestic visitors, with international travellers making up the rest.

There are currently around 9,300 hotel rooms operating in Penang. Harris noted that over the next five years, the state would need to increase the number of rooms by at least 2,000 to cater to new tourism products such as shopping malls and convention halls that would attract more visitors.

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