Hoteliers hoping to open a new property in Malaysia will have to look outside of Kuala Lumpur after the city’s leaders put a ban on new hotel licenses.
Announced this week, the indefinite license freeze is a result of over capacity, which has saturated the market, according to Kuala Lumpur City Hall.
The new rule applies to all accommodation from six-star properties to budget establishments and will not affect hotels that have already receiving planning permission.
Kuala Lumpur Mayor, Datuk Seri Mohd Amin Nordin Abdul Aziz, said the license freeze has been approved by the Economic Planning Unit (EPU) of the Prime Minister’s Department who agreed that saturation is impacting competition and rates.
“There is an oversupply of hotel and office spaces in Kuala Lumpur now and we have been advised by the Government to be strict on this, so we will not be giving any more DOs (development order) for hotels until further notice.”
Datuk Seri Mohd Amin Nordin Abdul Aziz, Kuala Lumpur Mayor
“So no more approvals for hotels for now.”
According to latest data by DBKL, Kuala Lumpur has 939 properties in the city and around 56,000 rooms including hotels, service apartments, budget hotels and backpacker hostels. This is a little less than half the 90,000 rooms found in the bustling city of Manhattan during 2014.
Over the last six months, only two planning approvals were issued for hotels plus five for budget properties.
The mayor said the existing number of space plus new properties opening up this year would be adequate enough to cater to the expected 12 million international tourists expected in the city this year.
“From here on out, we will advise the developers to look at other forms of development when they submit new applications.”
Datuk Seri Mohd Amin Nordin Abdul Aziz, Kuala Lumpur Mayor
The Malaysian Association of Hotel (MAH) Kuala Lumpur chapter chairman Shirley Lai, said the freeze on hotel licenses by DBKL was timely as it would allow the market to recover.
Meanwhile, latest figures from the Malaysia Government show visitor numbers from Australia continues to grow with half a million visitors to Malaysia in 2015, making it the countries eighth top tourist market.
To capitilise on Australian outbound travel, the government said it will focus more of its efforts on Australian travellers with a number of new initiatives to create higher consumer and trade awareness.
