PETALING JAYA: Malaysia is attracting more upscale international hotel names with the scheduled opening of a number of new properties in the country in the next few years.

Industry observers said this development would spur greater depth and product offerings in the local hospitality sector.

According to Knight Frank’s First Half 2013 Real Estate Highlights report, the local hospitality sector continues to attract international hotel operators’ interest.

The sector is expected to scale greater heights on concerted efforts by both the public sector and private industry players to move from mass tourism and focus on attracting a larger share of the high-end market.

“With the entry of more airlines, increase in airline routes and flight frequencies as well as the early launch of the promotional campaign for Visit Malaysia Year 2014, Malaysia remains at the forefront to welcome the arrivals of more inbound tourists,” the Knight Frank report added.

Launched on Jan 19, the campaign is timely to further promote Malaysia as a tourist destination and to achieve its 2014 target of 28.8 million tourist arrivals.

“The Tourism and Culture Ministry and Tourism Malaysia, together with local industry players, would continue their concerted efforts to organise national and international-level events to boost foreign arrivals,” the report added.

Last year, the country recorded 25.03 million tourist arrivals and tourist receipts of RM60.6bil, reςecting a year-on-year (y-o-y) growth of 1.3% and 3.9%, respectively (2011: 24.71 million arrivals and RM58.3bil in tourist receipts).

The cumulative supply of five-star hotel rooms currently stands at 11,017, following the opening of Majestic Hotel Kuala Lumpur (300 rooms) and the closure of Crowne Plaza Mutiara Kuala Lumpur (559 rooms) early this year.

St Regis at Kuala Lumpur Sentral will open for business on Dec 1, 2014, and the 238-room Regent Kuala Lumpur is set to open in the second quarter of 2015. Other upscale brands in the pipeline include W Kuala Lumpur (opening Jan 1, 2016) and Four Seasons (2017).

The hotel component of the mixed commercial development of the fourth phase of the KLCC master plan, to be ready by end-2017, will be operated by Raτes Hotels & Resorts. The project by Cititower Sdn Bhd is a joint venture between KLCC (Holdings) Sdn Bhd and Qatari Diar Asia Paciρc Ltd.

Meanwhile, Tradewinds Corp Bhd and Qatar Holding LLC will jointly develop the seven-star Harrods Hotel Kuala Lumpur, targeted for completion in 2018. The hotel will form part of an integrated development that comprises two blocks of service residences, an office block and a 400,000 sq ft retail mall with direct link to Pavilion KL.

Boutique hotel Alila Bangsar Kuala Lumpur, meanwhile, will open by early 2017 in a mixed development known as The Establishment. Located opposite Menara UOA Bangsar, the 124-key hotel will be managed by Singapore-based Alila Hotels & Resorts group.

The Knight Frank report said the long-awaited opening of the 110-room boutique-styled Wolo Hotel at Jalan Bukit Bintang and the 513-room Pullman Kuala Lumpur Bangsar have been delayed to the second half of this year.

During the year, Starwood Hotels and Resort, a world-renowned luxury hotel group, unveiled its sixth hotel brand, Aloft, in the country in March. The 482-room Aloft Kuala Lumpur Sentral, the largest Aloft property in the world, owned by Aseana Properties Ltd and managed by Ireka Development Management Sdn Bhd, is targeted at the Gen-Y segment.

The review period also saw the opening of the 90-room, four-star Premiera Hotel Kuala Lumpur by Impiana Hotels Resorts Management Sdn Bhd, its third city hotel. With the opening of these hotels, cumulative supply of four-star and five-star hotel rooms in Kuala Lumpur stands at 19,265.

C B Richard Ellis (CBRE), in its Greater Kuala Lumpur MarketView report, said incentives offered during Budget 2013 appeared to have borne fruit, as tourist arrivals rose by 15.9% year-on-year from 5.6 million from January-March 2012 to 6.5 million in the first quarter of 2013.

The tourism sector has been allocated RM358mil within the framework of Visit Malaysia 2013/2014 and is expected to attract 26.8 million tourists by 2014.

Other incentives announced include a three-year income tax exemption for local tourist operators who handled more than 1,500 domestic or 750 foreign tourists annually.

Kuala Lumpur’s hospitality market continued to be resilient during the second quarter of 2013, driven by increased tourist arrivals, as the overall performance of the hotel and service apartment sectors remained stable compared to the previous quarter.

“With much of the concern about political uncertainties that had been present for the past year seemingly resolved, it remains to be seen what impact this has on tourist arrivals and business activities.

“With a number of prominent developments due for completion over the next 12 months, the performance of these properties plus their impact on existing stock would have to be monitored closely,” the CBRE report added.

It said there were also enquiries from service apartment operators eager to increase their Malaysian portfolios, and that more such developments were expected in the near future.