However, there isn’t any sales yet as the economy remains uncertain and the lack of financing

by LYDIA NATHAN / Pic by MUHD AMIN NAHARUL

THE deep impact of the Covid-19 pandemic has been debilitating for the hospitality industry, but even more so for hotels that have been forced to close for the larger part of the last two years.

This resulted in a list of hotels being sold off as owners and operators were unable to sustain amid the uncertainty of the industry and its future.

Some of the hotels on the list included Sheraton Imperial in Kuala Lumpur (KL), Holiday Day Inn Penang, Marina Vista in Port Dickson and a slew of other unnamed hotels on the PropertyGuru’s website.

Zerin Properties CEO Previndran Singhe said some 30% to 40% of hotels that closed down have been put on the market including luxury five-star hotels in KL as well as resorts in Langkawi and Penang.

“Demand for the hotels have definitely picked up over the past few months. We have been very busy liaising with potential buyers on their requirements and managing their information needs, considering the lockdown. Now with some easing of the lockdown, we anticipate more activity,” he told The Malaysian Reserve (TMR) in an interview recently.

According to Previndran, buyers’ interest for hotels in the country has definitely increased, especially from locals with deep pockets.

“There has been foreign interest, but because of the lockdown and closed borders, the ones currently in Malaysia have been more actively seeking.

“Some of the factors that are driving the sales are the good sale prices and the strength of the domestic travel market here,” he said.

However, he added that there has been no sale just yet, as the economy remains uncertain of the industry reopening and the lack of financing.

Previndran said the sale of the hotels include the furniture, fittings and equipment, as well as hotel operating equipment.

“Many owners do practise proper governance and maintenance of the assets. However, I do see an opportunity to renovate and improve product offerings once sold,” he opined.

With many states moving into Phase 2 of the National Recovery Plan (NRP), Previndran expects more transactions in the market.

“Hotels are preparing themselves for an increase in occupancy with the opening up of the market. I would say we have one integral strength, our domestic tourism. This has proven to be a strong backbone of the market as observed after MCO1.0 and we will see it again,” he noted.

Meanwhile, Malaysian Association of Hotels CEO Yap Lip Seng estimated since 2020, roughly 120 hotels had closed, some permanently and others temporarily.

He said the situation has since stabilised and stagnated with most looking forward to reopening, particularly with the positive news of reopening Langkawi for domestic tourism bubble.

“We are only left with the last quarter of 2021 and we have yet to see full reopening of interstate travel which is the key to the industry’s recovery.

“Although Langkawi has reopened for domestic tourism, it is also set as pilot test for the reopening model, of which if successful, will trigger the reopening of other destinations.

“Hence for 2021, we can expect occupancy rates to remain low, as projected earlier in the range of 23% overall,” he said.

Yap opined for the next six months to a year, more hotels will reopen as the country transitions into Phase 2 and 3, and eventually into Phase 4 of the NRP.

“However, hotels will likely still operate on partial inventory and resources until and unless we see plans on reopening international borders and tourism, which will also be dependent on statuses of other countries,” he told TMR recently.

According to Yap, Malaysia is still an attractive investment target post pandemic for tourism and hotels, with high possibility of healthy recovery driven by both domestic and international demand.

“We have noted increased interests from abroad as well as locally to acquire properties and assets but to date we have not seen any large transactions take place other than those that were already confirmed before the pandemic.

“Hence at the moment, it is still not justified for owners to sell at below market value,” he said.