Kuala Lumpur hotel stock to grow by 9% over the next three years
About two-thirds of the new stock will be in the luxury segment.
International passenger traffic to Kuala Lumpur has been rebounding since the beginning of 2022 according to Knight Frank, with average month-on-month growth of 27%, boosted by the complete removal of border restrictions, improving flight connectivity, and easing of regional travel restrictions.
In a report, Knight Frank said hotel occupancy in Kuala Lumpur has been rising since early 2022, reaching 60% in August 2022. The city has been successful in pushing up the Average Daily Rate (ADR) which was only 6% down from August 2019, although less successful at improving its Revenue Per Available Room (RevPar) which was down 28%.
Here’s more from Knight Frank:
We expect the recovery in the Malaysian hotel market to continue in 2023. The demand outlook is strong. On the supply side, Kuala Lumpur’s existing hotel stock of 47,500 is forecast to grow by 9% over the next 3 years and about 60% of this new supply will be in the luxury and upper upscale segments which are currently underrepresented. We feel these new luxury offerings will make Kuala Lumpur a more attractive holiday destination, boosting occupancy and growth in hotel revenues.
We are forecasting that Kuala Lumpur hotel occupancy will reach about 75% by late 2023, with RevPar recovering in 2024.