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Malaysia's budget hotels will not have much of a future if they do not improve their facilities and services as foreign rivals are about to make their presence felt.Come 2012, foreigners are expected to be allowed to operate budget hotels in the country, said Malaysian Budget Hotel Association (MBHA) vice-president for training and research Mohamed Hassan Hamzah.
"Our local budget hotel owners need to be more innovative in terms of marketing and promotion to ensure their survival," he said.
Mohamed Hassan cited the proposed liberalisation of services trade tabled in the middle of last year during the Asean Framework Agreement on Services.
Under the proposal, foreigners will be able to own up to 30 per cent of a budget hotel in the country by 2012 and 49 per cent in 2015. It involves one-and two-star hotels. However, this has yet to be decided.
There are about 6,000 budget hotels in Malaysia.
"Currently, only 1,500 budget hotels are registered with MBHA, and the number ought to rise," Mohamed Hassan told reporters at a press conference in Shah Alam recently.
The budget hotel business here has huge growth potential as Malaysia is a major tourism destination in the world.
Under the Economic Transformation Programme, the government has big plans to develop the industry further.
"If we want tourists to come to Malaysia and stay at our budget hotels, owners can help by providing good facilities and services."
Mohamed Hassan observed that budget hotels here are normally 50 per cent to 60 per cent full during weekdays and could be fully occupied on weekends. Although occupancy rates have risen, many will not survive if they do not upgrade their services.
Tourism is the country's second highest earner, after manufacturing, accounting for 12.3 per cent of the economy last year.
By Business Times
