Wednesday, December 28, 2005

Sabah hotels unlikely to raise rates

Kota Kinabalu: It is still uncertain if Sabah hotels will revise their room rates early next year like their counterparts in the peninsula.

Some hotels only adjusted their rates including the seasonal and package rates several months ago, according to Sabah Hotels Association (SHA) President Christopher Chan.

He said it was a common practice by owners to revise room rates in January but this was by no means a rule in the local industry.

"There is not even a consensus by all hotels in the State to adjust the rates. In fact, it will depend on the hotels' demand and supply as a basis to increase the room rates or otherwise.

"Some hotels would base their decision on occupancy rates and the season as to whether it would be wise to review the rates," he told Daily Express on Tuesday.

It was reported that hotel room rates are expected to increase in 2006 as hotel owners try to match rates in the region and achieve better returns on investment.

It reported that the increase is expected to be between 15 and 20 per cent which translates into some RM15 for three-star hotels and up to RM40 for five-star hotels.

"For instance, hotels in the East Coast would have to consider several factors before they decide to review the room rates," Christopher said.

"They have to look at their occupancy rates which are related to the demand and supply including the market segment of tourists visiting the State. Also the hotels in the East Coast do not enjoy high occupancy rates as what has been happening in hotels in the West Coast.

"That is why there is need to push more tourists from the State Capital to the East Coast area. And now there will be two new hotels, with a three-star hotel providing 120 rooms and one with 30 rooms coming up, and this will mean some stiff competition for the hotel operators in the area."

Christopher said it is also imperative to look at the travel pattern of international tourists coming to Sabah as it would have some impact on the local industry here.

For the western market segment like the Europeans, he said the tourists would normally make their accommodation reservation one year ahead and they are not really particular about the price of the room as their currency rates are higher than the Ringgit.

Also, he said, generally the room rates in the Sabah hotels are comparatively low compared to the peninsula.

On the other hand Asians tourists like the Koreans, Indonesians and Singaporeans, he said, would look for alternative choices within the region if they found the hotel rates in the State quite high.

He recalled one experience where the Koreans did not choose to visit Sabah when they found out about the hotel rates.

Meanwhile, Tourism Malaysia Sabah branch director Iskandar Mirza said he foresees a tendency for hotels in the State, especially the five-star hotels in the West Coast area, to raise their room rates as their occupancy rate is more than 80 per cent.

"Actually it is typical for hotels in the country to revise their room rates every year. There is nothing unusual about the review.

"When there is an economic growth, then the hotels tend to raise their room rates to be competitive. But if there is to be an economic depression, then the hotels would lower the rates," said.

He expects to see the hike in room rates to be less than 10 per cent. Iskandar said hotels do not have to get permission from the authorities to revise their room rates. Normally, the hotels would inform their regular customers of their new rates including the promotional and package rates.

Five-star hotels in Sabah charge anything from RM300 for rooms, RM200 onwards for four-star hotels and RM150 onwards for three-star hotels.

Courtesy of Daily Express

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