Berjaya wants hotels to be premium class

INTEGRATED : Berjaya Times Square houses the group's best-performing city hotel as well as retail lots.

Berjaya Hotels & Resorts, the hospitality arm of Berjaya group, is keen to operate only five-star or premium class hotels because of their better yields.

The group, which owns and operates 14 hotels under the Berjaya brand and owns two others operated by international hotel chains, will open two more five-star properties this year, in Malaysia and Vietnam.

In line with its focus on five-star properties, Berjaya has sold the Berjaya Le Morne Beach Resort in Mauritius, KL Plaza Suites in Kuala Lumpur and Berjaya Palace Hotel Kota Kinabalu.

Future openings are scheduled for the Maldives and South Korea in addition to more openings in Vietnam and Malaysia. These will add to its current room inventory of 4,000.

“The earnings before interest, taxes, depreciation and amortisation (ebitda) for five-star properties in Langkawi, Redang, Times Square Kuala Lumpur amount to about 43-45 per cent. Our three-star property in Penang’s ebitda is about 20 per cent,” Berjaya Hotels and Resorts acting head Foo Toon Kee said.

The group is keen to further develop its presence in Vietnam where very little investment is required but the hotels can fetch handsome room rates.

The investment in a 70:30 joint venture, with Berjaya holding majority stake, on Phu Quoc Island is estimated at below US$10 million (RM34 million).

However, the average room rate (ARR) it expects to garner from the 110-room hotel there is between US$150 and US$180 (RM513 and RM616) a night. The hotel will be ready by the year-end.

“We are looking at two or three more hotels in Vietnam within five years, depending how fast the development there takes place,” Foo said.

Another joint-venture company – Berjaya (56 per cent), Ritz Carlton (33 per cent) and Far East Consortium International Ltd (11 per cent) – is leasing an island in the Maldives to build 90 to 100 chalets under the Ritz brand.

“The property will start construction next year and finish within two-and-a-half years from now. Hotels in the Maldives fetch ARR of US$1,000 (RM3,420) a night, and up to US$2,500 (RM8,550) a night during peak season,” Foo added.

In the meantime, existing properties will be spruced up.

The group’s best-performing city hotel, the Berjaya Times Square Hotel and Convention Centre, is undergoing a RM20 million renovations and refurbishment.

Some RM35 million was spent on the 196-room Berjaya Redang Beach Resort. It added 130 new rooms and reduced the number of older rooms.

The Berjaya Tioman Beach, Golf and Spa Resort renovated 10 suites and 52 deluxe rooms.

“Our advertisement and promotion strategy for the year is to promote ourselves as a premium-class. We will be spending 20 per cent more this year on public relations and marketing,” Foo said.