Businessman Tan Sri Syed Yusof Tun Syed Nasir says the company sees opportunities to buy hotels and resorts in Sabah at a discount
Singapore-based Hotel Properties Ltd (HPL) plans to expand its hotel portfolio in Sabah, with a view to snap up distressed hotels there.
Businessman Tan Sri Syed Yusof Tun Syed Nasir said the company sees opportunities to buy hotels and resorts in Sabah at a discount from their existing owners who have been hit by the current economic slowdown.
HPL, which is controlled by founder and property tycoon Ong Beng Seng, manages Concorde Hotel Kuala Lumpur, Concorde Shah Alam, Concorde Inn Sepang, Casa Del Mar Langkawi and The Lakehouse in Cameron Highlands.
"There are always expansion plans within the HPL group. We will buy, if the price is right. By doing so, we will be creating new employment.
"In hospitality, it is sad to see hotels close or a big (number of) staff being laid off," Syed Yusof, who is a shareholder of HPL, told Business Times in an interview.
The company is looking to buy small properties such as boutique hotels as they offer gross operating profit (GOP) of over 40 per cent.
For instance, the GOP for Casa Del Mar and Concorde Kuala Lumpur were 45 per cent and 38 per cent, respectively, higher than the 35 per cent for the remaining properties.
"I don't think we should miss the boat. (Sabah's) eco-tourism is booming. If we buy a property in Sabah and keep it unique, it should sell like hot cakes," Syed Yusof said.
HPL is also mulling to set up a Hard Rock Cafe in Kota Kinabalu and buy a resort in Sipadan Island.
"These plans are still preliminary. If we can manage the resort in Sipadan Island professionally, there will be good money," Syed Yusof said.
While the plans look good on paper, Syed Yusof is aware that hospitality is not an easy business to run and is vulnerable to terrorism, diseases and a recession.
"Malaysia will always be indirectly affected when the world is in crisis. Hospitality is a vulnerable business, with slow returns and huge capital. A lot of hard work is involved to keep the business afloat. It's not all that rosy as one may think it to be," he added.
Syed Yusof said the most important things in this business are dedication and cash flow to make it work.
"To succeed, one must also have good partners, management and staff. For instance, our partner, Ong, is internationally recognised and thus, we have no qualms about buying properties in good or bad market conditions," he said.
On why he has been staying in the business for over two decades, Syed Yusof said it was because of his passion for the industry.
Concorde Kuala Lumpur, formerly Merlin Hotel, on Jalan Sultan Ismail is Syed Yusof's first hotel venture in 1990, after halting from property development activities temporarily.
"Our partners (referring to Ong and Sultan Sharafuddin Idris Shah of Selangor) are dedicated in tourism. Our group is ready to assist the Tourism Ministry in new developments for the sector," he said.
By Business Times (by Sharen Kaur)