Malaysia’s hotel industry will add thousands of new rooms in the capital in preparation for the resumption of tourist visits as the country opens up.

CBRE Asia Pacific’s latest Kuala Lumpur Hotel Market Outlook & Prospects 2022 report revealed that more than 3,000 new hotel rooms and hotel suites are set to open in Kuala Lumpur this year alone.

As reported by NST, among the hotels offering new rooms and suites are the 232-room Park Hyatt Kuala Lumpur at PNB 118, the 544-room Conrad Kuala Lumpur (the former MAS headquarters on Jalan Sultan Ismail), the 535-room Parkroyal Collection Kuala Lumpur (and Pan Pacific Serviced Suites Kuala Lumpur), the 160-room Kempinski Hotel Kuala Lumpur, the 252-room Amari Kuala Lumpur, and the 690-room Fairmont Kuala Lumpur. These properties account for a little over 2,400 of the total count of new rooms and suites expected to come online in 2022.

From 2023 to 2025, an additional 1,260 new hotel rooms will be unveiled at 471-room Kimpton Kuala Lumpur @ The Tun Razak Exchange, the 226-room So Sofitel Kuala Lumpur Hotel & Residence in Jalan Ampang, the 213-room Jumeirah Kuala Lumpur Hotel & Residences, and the 350-room Edition Kuala Lumpur.

Naturally, with more hotel accommodation options, more employment is created for the local workforce, helping many from the hotel line who have been heavily impacted over the last two years. However, the question remains if a surplus of hotel accommodations will be able to generate profitable enough revenues after opening. Can Kuala Lumpur actually fill enough of these rooms? It all depends on how Malaysia wants to boost tourism in general going forward, the question looming large because of how the years leading up to the pandemic saw a gradual decline in yearly visiting tourists to the country.

In grappling with the Covid-19 crisis that affected the hospitality industry on a global scale, many hotels, restaurants, golf resorts, entertainment venues, and sporting clubs had to cut costs to operations by letting go of many employees. Still, the losses were devastating.

According to the Malaysian Association of Hotels (MAH), the industry lost revenues of more than RM10 billion in 2021, up from RM6.3 billion in 2020. During the Movement Control Order in 2020, the industry lost about RM300 million in revenue every two weeks.

Due to significant financial losses, Malaysia saw at least 120 hotels forced to close operations either temporarily or permanently when the pandemic raged on for more than a year. But when domestic travel resumed last year with strict SOPs, the tourism industry slowly began to pick up again.

“I believe Malaysian hotels and resorts will be driven by domestic demand for at least another year, or until the global economy improves and there are no international travel restrictions. People prefer to travel within Malaysia for the time being because travelling abroad is inconvenient. Meanwhile, we can see that discretionary spending has suffered and that spending patterns have shifted. New routines and expectations have emerged. To weather the storm, both new and existing hotel players will need to consider all of these factors,” says a prominent Malaysian hotelier.