Thursday, June 20

Tough year for hotels

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KOTA KINABALU: Room occupancy rate expected to drop below 60 per cent next year.

The hotel industry in Kota Kinabalu is performing well this year as three-star hotels and above are experiencing an occupancy rate of 64 per cent as of November, an increase of four per cent compared to the same period last year.

However, Malaysian Association of Hotels (MAH) Sabah and Labuan president Alex Cham predicted that the occupancy rate might drop below 60 per cent next year as Malaysia Airlines (MAS) recently announced the suspension of four routes on the regional network starting early 2012.

The suspended routes include the twice-weekly Kota Kinabalu-Osaka (starting January 6), the thrice-weekly Kota Kinabalu-Perth (January 31), the four-weekly Kota Kinabalu-Haneda (February 1) and the four-weekly Kota Kinabalu-Seoul return B737 route (February 21).

In terms of average room rate, there was a slight drop from RM256 last year to RM250 this year, which Cham attributed to the more competitive environment with more new hotels coming up.

Room rates aside, the tourism industry is actually picking up with more tourist arrivals this year with the announcement to make Kota Kinabalu International Airport (KKIA) the Eastern hub and the addition of more direct flights from Kota Kinabalu to Korea, Japan and Perth in Australia.

Cham told The Borneo Post in an interview the hotel industry was starting to enjoy a rebound from the financial crisis in 2008 and lower occupancy rate in 2009, but the suspension of direct flights would hit tourism arrivals to Sabah.

In addition, Cham said Japanese or Korean tourists preferred direct flights, instead of stopovers and connecting from Kuala Lumpur and finally to Kota Kinabalu, which was time consuming.

When the earthquake and tsunami hit Japan in March, Sabah actually saw an increase in Japanese tourists arrival, he said, due to the availability of direct flights.

Cham continued to say that there used to be a direct flight from Japan several years ago, and when the flight was taken off the route, the industry immediately noticed a drop in tourist arrival from Japan.

Furthermore, Cham said Royal Brunei had cancelled its flight from Kota Kinabalu to Perth when MAS launched the route, and now he was not sure if Royal Brunei would resume the route again.

“The decision by MAS (suspending four routes in the regional network) is not a good thing for tourism.

“Sabah tourism is a major income source after the oil palm plantations,” he said.

He pointed out that MAS should find a solution to cut their losses instead of suspending direct flights as it would impact on the tourism industry here, and probably reducing  national income.

MAH Sabah and Labuan Chapter has 47 members, the majority of them three-star and above.

“If MAS cut down on direct flights, the occupancy rate could decline below 60 per cent next year.

“Because as more hotels come up, the cake is not large enough to share,” Cham stressed.

Meanwhile, Sabah Hotel Association (SHA) president Christopher Chan said larger hotels (three-star and above) had achieved an overall 70 to 80 per cent occupancy rate this year while budget hotels (two-star and below) reported a drop of around 10 per cent in their occupancy rate.

The reason for the drop was the increase of new hotels here, he said, which might not necessarily correspond to tourist arrivals to Sabah.

Hence, Chan urged the government to collaborate with the hotel industry in conducting a study to determine how many additional rooms should there be in order to meet the influx of tourists.

“This is a better approach because too many hotel rooms will affect the hotel industry,” he said.

In addition, members have voiced out that the mushrooming hotels causes shortage of workers in the hotel industry, as well as the difficulty in finding workers that fit their requirements.

“What the (hotel) trainees studied might not fit with our requirement, or they may lack commitment and professionalism,” Chan said.

“Hiring a good worker is not easy, and a hotel has so many different departments.”

Chan called on the government to provide skills training for workers. He added that hotels were also facing shortage of chefs.

SHA currently has 70 members who are operators of four-star hotels and below.