Book early, rooms in Penang are going fast

Prospects for the year are looking rosy with 2011 expected to close at a 67 per cent occupancy and a record high hotel room rate of RM240.

Penang: Hotels in Penang are projecting a record year in 2011 as more rooms are filled and more money is made each night. And the outlook for 2012 is expected to be even better.

In the first seven months of this year, occupancy hit 65.7 per cent with an average room rate (ARR) of RM231. This compares to the first seven months of 2010 when average occupancy was at 59.3 per cent and an ARR at RM229.

"July 2011 posted the highest ever single month occupancy in the past five years, at 82 per cent," president for the Malaysian Association of Hotel (MAH) Penang Chapter Marco G. Battistotti said.

Accordingly, prospects for the year are looking rosy with 2011 expected to close at a 67 per cent occupancy and a record high room rate of RM240. This is despite additional room inventory this year.

As at end of last year, MAH member hotels had a total of 7,706 rooms, while up to July 2011, the rooms available touched 7,803.

These, Battistotti said, are the best numbers since the association started tabulating the statistics.

While occupancy is in fact similar to that achieved in 2006, ARR at that time was only at RM178.

MAH members in Penang represent 80 per cent of the available hotels in the state.

"This positive trend could continue in 2012," Battistotti told Business Times.

Battistotti, who said hotels on the mainland tend to have better rates as there are fewer players, divides Penang island into two sectors.

Hotels located within Gurney Drive to Bayan Lepas are considered city hotels and those located within the Tanjung Bunga and Burau Bay as beach hotels.

City hotels tend to generally have 65 per cent corporate crowd and 35 per cent leisure, while beach hotels tend to have the opposite composition.

The city hotel enjoying the highest ARR is E&O Hotel at around RM540, while the highest rate garnered by a beach hotel is Shangri-La Rasa Sayang Resort & Spa.

The better performance, especially by city hotels, is attributed to support from multinational corporations and manufacturing facilities located within the Free Industrial Zone. Some 70 companies here provided 100,000 room nights last year.

The Arab market has also improved this year. They provided 89,000 room nights in the first seven months compared with 81,000 last year.

Apart from a strong corporate market and a leisure market, Penang also gets a good number of arrivals for medical tourism.

George Town's status as a Unesco World Heritage City has spurred arrivals as it has helped increase Penang's popularity.

"For the European market, heritage is a strong selling point," Battistotti said.

Indonesians and Singaporeans remain Penang's largest foreign arrivals.

A good mix of leisure, backpackers, corporate and meeting, incentive, convention and exhibition is expected to augur well for the island over the next three to four years, Battistotti said.

By Business Times