CBRE|WTW: Malaysian island resorts will benefit from a tourism recovery this year

 By Sharen Kaur - Published in NST Property on April 28, 2022 

File Photo of Pangkor Laut Resort.

sharen@nst.com.my

Resorts in Langkawi, Kedah, and other popular Malaysian islands will benefit greatly from a tourism recovery this year, says CBRE|WTW chairman Foo Gee Jen.

According to him, business travel and leisure expenditures on resorts in Langkawi, among other getaway islands, will see a gradual increase in occupants as many have grown to worry less about the statistics of the Covid-19 numbers, which initially created a mental block.

Foo said the increasing level of confidence among tourism operators, coupled with easing entry procedures, will drive the demand for tourism products.

According to CBRE Asia Pacific's insights from its Kuala Lumpur Hotel Market Outlook & Prospects 2022 report, Malaysia's tourism market is expected to recover this year, led by the return of Singapore travellers following the resumption of travel between the two countries.

Singapore has historically been the top source market for Malaysia, accounting for an average of 46 per cent of total arrivals between 2015 and 2019.

Kuala Lumpur will benefit from Malaysia's reopening to international travel.

According to Steve Carroll, CBRE's head of hotel and hospitality for Asia Pacific capital markets, Kuala Lumpur has long been a hub for business and leisure travel in the region.

"Like many travel hubs, the city's hotel industry has had to navigate the challenges brought about by the pandemic. However, the city's strong economic growth and the government's plan to revitalise its tourism industry, coupled with improving fundamentals and notable infrastructure developments in the pipeline, make Kuala Lumpur's hotel market a prime candidate for investment in 2022 and beyond," he said.

Kuala Lumpur's hotel RevPAR (revenue per available room) increased in the fourth quarter of 2021, and CBRE expects RevPAR to rise further in the coming years as international brands enter the market and luxury and upscale hotel projects are completed.

Mid-scale city hotels continue to maintain healthy gross operating margins of 40 to 50 per cent, in line with other well-established markets in the region such as Singapore.