Sharing Session Doing Business in East Malaysia The Ascott @ IE Singapore 9 April 2014
AGENDA Overview of Hospitality / Tourism Industry in East Malaysia Ascott s Presence in Kuching Why Kuching? Key Challenges Going into Sarawak 2
Tourism & Hospitality Industries - Sarawak Category Estimated Tourist 2014 Estimated revenue Major Attractions Culture Details Visit Sarawak Year 2014 is projected to bring in 4.2 million tourists. The estimated revenue for the state is expected to be RM9 billion, but could be over RM10B. National Parks such as world heritage site in Mulu National Parks. There are over 20 National Parks in Sarawak, of which, 5 are within 1 2 hours drive in Kuching. There are over 25 ethnic groups in Sarawak, with different festivals that play important part in major events. International Events 1. World Music Rainforest Festival 2. International Jazz Festival 3. Borneo Cultural Festival 4. Sarawak Regatta 5. World Harvest Festival 3
Tourism & Hospitality Industries - Sabah Category Estimated Tourist 2014 Estimated revenue Major Attractions Air Transportation Hub Details Visit Malaysia Year 2014 is projected to bring in a number of 3.4 million tourists into Sabah. The state is projecting a total revenue of RM6.3B for the year 2014 from tourism alone. Eco tourism, mainly the World Heritage Site at Kinabalu National Park. Others such as Orangutan Rehab Centre, diving spots in renowned islands. Second largest and busiest airport in Malaysia after KLIA with a total 6.9million passengers in 2013. Major airlines MAS, China Air, Dragon Air, Korean Air, Air Asia, Indonesia Air, Silk Air, Brunei Airlines, Hong Kong, Cebu Pacific,etc. International Events 1. Sabah International Folklore Festival 2. KK International Film Festival 3. Pesta Kaamatan Festival (Cultural) 4. Kinabalu International Climbathon 4
AGENDA Overview of Hospitality / Tourism Industry in East Malaysia Ascott s Presence in Kuching Why Kuching? Key Challenges Going into Sarawak 5
Ascott s Presence in Kuching, Sarawak Ascott started its first property in Kuching in 1997. Regalis Court Kuching, a boutique hotel which opened its business in 1997 with a total of 42 rooms Thereafter, Ascott launched its first Somerset in Kuching in 2001, Somerset Gateway Kuching with a total of 70 units stylish apartments nestled in the heart of city centre. The development of Gateway Kuching was an integration of serviced office and residences by partnership between Ascott and local owner, with a percentage of 49% owned by Ascott. 6
Ascott s Presence in Kuching, Sarawak Ascott owns a total of 24 units of serviced office at Gateway Tower with a total lettable area of 66,171.50 sq ft. In 2011, Ascott ceased its operations at Somerset Gateway upon the expiration of management agreement of 10 years tenure. In November 2012, Ascott s first Citadines brand in Malaysia opened its business in Kuching with a total number of 215 units of contemporary residences. Citadines Uplands Kuching is located along the Jalan Simpang Tiga, Kuching s second CBD. 7
Ascott s Presence in Kuching Regalis Court Gateway Kuching Citadines Uplands Kuching Kuching City Map
Ascott s First Boutique Hotel in Kuching Regalis Court Kuching 1997 to 2002 Source: Wikipedia
Ascott s First Serviced Residence in Kuching Source: Wikipedia Somerset Gateway Kuching 2001 to 2011
Ascott s Serviced Office in Kuching Source: Wikipedia Gateway Serviced Office 2001 till present
Ascott s First Citadines in Kuching Citadines Uplands Kuching Nov 2012 till present
AGENDA Overview of Hospitality / Tourism Industry in East Malaysia Ascott s Presence in Kuching Why Kuching? Key Challenges Going into Sarawak
Why Kuching? Ascott s entry into Kuching in the early days: Saw great potential with tourism sector booming Underpinned by strong economics within Sarawak abundant natural resources, and strong federal business Kuching is also Sarawak s key and largest state Potential tie-up with a strong local partner 14
Since then Sarawak has grown significantly in the last decade Population continues to grow Kuching has now become a gateway: Strong federal business Leisure business increasing by leaps and bounds MICE industry growing significantly Within other parts of Sarawak oil and gas industry is booming with new technology, more oil fields being located 15
AGENDA Overview of Hospitality / Tourism Industry in East Malaysia Ascott s Presence in Kuching Why Kuching? Key Challenges Going into Sarawak
Key Challenges Category Government Issue Logistics Infrastructure Description There are two legislative state and federal government, as well as local council. Procedural wise may take sometimes to obtain. Example: for an international hotel establishment will depend very much on MICE and leisure market. As such, Halal certification for the F&B is very much required. Thus, application may take from 6 months to a year for approval. Air connectivity for both Sabah and Sarawak is still difficult, especially from western region. Connection is via Kuala Lumpur or Singapore. Domestic land transportation is also lacking, especially connecting major cities such as Kuching to Miri and etc.
Key Challenges Category Manpower Description Generally, tourism and hospitality industries are lack of skillful workers mainly the front liners. As these two industries are growing rapidly, the resources are inadequate, resulting in bringing foreign workers from neighbouring countries. For west Malaysian to work in Sarawak will require a working visa, therefore, this has been a challenge for some big organization. Other resources Both states are located in the island of Borneo, therefore, most imported items will take a while to reach the destination. Items brought in either by air or shipment.
AGENDA Overview of Hospitality / Tourism Industry in East Malaysia Ascott s Presence in Kuching Why Kuching? Key Challenges Going into Sarawak
Going into Sarawak Potential for Sarawak remains huge but may take time to develop Understand the market well each state is different, and rules and regulations may not be similar to West Malaysia Be prepared to go into the second-tier cities, eg. Bintulu etc Depending on your nature of the business - find a good local partner to work with. There is no rush take your time Be patient It will be worth it! 20
Thank You