KUALA LUMPUR: The local hotel industry battling with low occupancy rates almost five years after the COVID-19 pandemic, is hopeful that the increase in number of tourists and Visit Malaysia Year 2026 will help growth.

Malaysian Association of Hotel (MAH) chief executive officer Isaac Mohan Raj said that the hospitality industry is optimistic both in the short and medium term as the demands for accommodation will track the nation's tourism growth.

In the short term, he said that visitor arrivals might increase, driven by the 30-day visa-free travel for tourists from China and India, as well as the commemoration of 50 years of diplomatic ties between Malaysia and China.

"Looking ahead to the medium term, Visit Malaysia Year 2026 promises to be a pivotal moment for the industry.

"As we prepare for and host this significant event, we anticipate a boost in tourism infrastructure and promotional efforts supported by the government," he told Business Times.

MAH has over 1,000 members.

Raj said many of the hotels which temporarily closed during the pandemic have since reopened, driven by the resurgence in tourism demand.

He added that even a few of the permanently closed hotels have found new life under different management or have been rebranded, contributing to the industry's gradual recovery.

According to Raj Malaysia maintains a healthy balance of both independent and franchise hotels.

While independent hotels outnumber franchises in terms of quantity, he said franchise hotels often take centre stage in industry discussions but both segments complement each other rather well.

"Independent hotels offer unique, personalised experiences that highlight local culture and charm. Their flexibility allows them to cater to niche markets and adapt swiftly to changing trends.

"On the other hand, franchise hotels provide consistency, brand recognition, and trusted standards, appealing to guests who value familiarity and reliability. This diversity enriches our hospitality landscape, ensuring guests have a wide array of options," he added.

Malaysian Association Hotel Owners (MAHO) president Tan Sri Teo Chiang Hong said hotel occupancy has not improved much since the pandemic despite the number of tourists going up to 9.48 million as of May 2024.

As of April 2023, MAHO had 76 members with an inventory of 150 hotels and a total of more than 45,000 rooms in the country.

According to Teo, occupancy it is still hovering around 60 per cent.

"This might be the impact of tourists choosing to stay at unlicensed or non-registered tourist accommodation premises, such as short-term rental accommodation (STRA) like Airbnb.

"The government must quickly put them in the system, to license, regulate and have enforcements on them ahead of the upcoming Visit Malaysia Year 2026," he said.

Teo said four hotels were closed permanently in 2021 and two more in the following year.

These include Holiday Inn Penang, Ramada Plaza Melaka, Mahkota Hotel Melaka, Hotel Equatorial Penang, Grand Borneo Hotel Kota Kinabalu and Hotel Royal Penang.

MAHO members own several 3-5 star hotels international and local brands such as JW Marriott, Ritz-Carlton, Mandarin Oriental, Sheraton Imperial, Hyatt Regency, Hilton, Le Meridien, Mercure, Dorsett, One World, Berjaya, Lexis, Holiday Villa, Swiss-Garden.

Based on Statistics Department's (DOSM) Tourism Satellite Account 2023, the global pandemic COVID-19 had impacted the Malaysian hotel industry as 330 hotels shuttered.

The number of hotels decreased 6.1 per cent from 5,382 in 2019 to 5,052 in 2022, leading to a lower number of rooms by 5.2 per cent, or 17,847 rooms, from 340,547 to 322,700.

After the border reopened in April 2022, the number of international tourists surged 74 times to 10 million in 2022 and then steadily doubled to more than 20 million in 2023.

In 2023, the number of hotels increased 3.0 per cent to 5,204 while the number of rooms rose by 3.4 percent to 333,780.

Malaysia's tourism industry amounted RM275.8 billion in 2023, with the share of 15.1 per cent to the gross domestic product compared to 13.9 per cent in the previous year.

https://www.nst.com.my/business/economy/2024/09/1106968/hotel-sector-banks-tourist-arrivals-visit-malaysia-year-2026-fill