APPD Market Report Article

Kuala Lumpur

February 28, 2023

Nihat Ercan, CEO - Hotels & Hospitality Group, Asia Pacific


MYR 276


International demand shows steady recovery

  • According to Malaysia Tourism Data, Malaysia welcomed about 5.56 million international visitors as of YTD September 2022, representing a 7579% increase as compared to the same period in 2021.
  • Since the reopening of borders, international arrivals have been consecutively increasing for six months. However, the gap to pre-pandemic levels remains large, as current figures only represent 27.2% of international arrivals in 2019.

Future supply primarily consists of new luxury offerings

  • A total of 1,685 rooms have opened in 2022. Key openings include the 535-key PARKROYAL Collection Kuala Lumpur, the 300-key Le Meridien Petaling Jaya and the 252-key Amari Kuala Lumpur.
  • In 2023, hotel room supply is expected to grow by 13.0% or a net increase of 6,319 rooms. Of these, 49% of the hotel rooms are in the luxury segment, 29% are upscale, and the remaining 22% are midscale and economy.

Uplift in occupancy leads to an improvement in RevPAR

  • Revenue per available room (RevPAR) of luxury and upscale hotels in Kuala Lumpur recovered by 213.2% to MYR 276 by December 2022, driven by the return of corporate and international demand. Occupancy rose 30.8 percentage points to 47.2% while ADR marginally increased by 8.7% to MYR 584.
  • Through the ‘Meet in Malaysia’ campaign, MICE demand in Kuala Lumpur has recovered significantly since the reopening of international borders. The Kuala Lumpur Convention Centre has welcomed 1,350 events, consisting of more than 360,000 delegates, which was cited to be about 90% of its 2019 performance.

Outlook: Prolonged recovery despite Mainland China reopening

  • Given the uncertainty around the return of Mainland Chinese tourists, the Malaysian government has allocated MYR 25 million in the form of discounts, vouchers and rebates to encourage domestic tourism. Moreover, almost MYR 1.5 billion has been committed to the development of the tourism sector and promotional and marketing efforts.
  • However, amid cumulative inflationary pressures and a global economic slowdown, domestic and international tourist arrivals will likely only experience a gradual recovery in 2023. Full recovery to 2019’s pre-pandemic levels are only expected in 2024.

Note: Kuala Lumpur Hotels refers to Kuala Lumpur's luxury and upscale hotel market.

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