LOCAL hoteliers already struggling with the drop in the number of tourists, especially from China, are preparing for the worst in the New Year.

Though the situation is not as terrible as in Thailand, local tourism destinations are continuing to suffer low occupancy during the holiday season.

Malaysian Association of Hotels president Cheah Swee Hee told The Malaysian Insight that Malaysia was seeing a marked drop in the number of Chinese tourists.

Even though the effect on local hotels is not as bad as Thai hotels, the situation does not bode well, he said.

In Thailand, the Thai Real Estate Association revealed the number of Chinese tourists has fallen drastically, with medium and smaller hotels in Bangkok, Phuket, Pattaya and other popular destinations suffering low occupancy during the holiday season.

“To my understanding, the drastic drop in Chinese tourists in Thailand was due to the government’s crackdown on ‘zero-group-fee’ tourism and the Phuket boat tragedy.

“Meanwhile, Malaysia has always relied on chartered flights to bring Chinese tourists into the country, but due to the increasing spending power of Chinese tourists, they are now heading to other countries, such as Japan, South Korea, Europe or the US.”

He added that the Malaysian hotel industry also faced tough challenge from the high number of alternative accommodations in the country, including those that are not registered.

On challenges of occupancy, MYhome Hotel director Wu Kiat Ming, who owns eight budget hotels, said occupancy at his hotels, compared with the same period last year, dropped by about 30%-50%, with hotels in Kuala Lumpur alone seeing a drop of 40% to 50%.

“The market is very quiet currently. The occupancy rate in Kuala Lumpur has fallen drastically. This phenomenon is not confined to Malaysia. The hotel industry in other countries is also facing the same problem,” Wu said.

Hotels can only do promotions and offer rooms at lower rates in the hopes of attracting more customers, on the basis that a low turnover for rooms is better than leaving them vacant, he said.

Meanwhile, the owner of a homestay in Johor Baru said the market is taking a turn for the worse, with reduced number of tourists while competition among hotels remains fierce.

Wanting to be known only as Tan, his homestay is an apartment unit in Iskandar Puteri, a strategic location just half an hour from the Sanrio Hello Kitty Town, not far from Johor Baru.

“I’ve been operating my homestay for two years. Business was satisfactory in the past. I can have up to 10 plus days of occupancy in a month, but tourist numbers lately have reduced and my unit is now empty most of the time.”

The homestay has never generated much income to begin with and he has not hired any helper to look after the unit, cleaning up the apartment himself after a guest’s stay. Due to the current difficulties, he decided to pull the plug and lease out the unit instead.

On how to attract more tourists, especially Chinese tourists, Cheah said Malaysia can only stand out and compete with other nations by offering the best value for money.

He also warned that if tourist numbers continue to fall and if the government does not act fast to regulate unregistered accommodations, the hotels industry will be the hardest hit. – December 22, 2018.