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Friday, July 3, 2009

Dorsett plans 10 more hotels in Malaysia

SUBANG: Hospitality player Dorsett International Sdn Bhd aims to add 10 hotels to its existing chain of five hotels and resorts in Malaysia in five years, says president Eddie Tang.

He said the parent company had allocated RM500mil for the expansion.

Dorsett International, set up at the end of last year, is the Malaysian hospitality arm of Hong Kong-listed Far East Consortium International Ltd, which is mainly engaged in property development and hotel operations in China.

Dorsett International now owns five hotels – the five-star Sheraton Subang Hotel & Towers, the international class Grand Dorsett Labuan Hotel, the four-star Dorsett Regency Hotel in Kuala Lumpur, the four-star Maytower Hotel & Serviced Residences in Kuala Lumpur and the three-star Dorsett Johor Hotel in Johor Baru.

“Currently, we have five hotel projects in the pipeline under our five-year expansion plan,” Tang told StarBiz in an interview.

He noted that of those five projects, two in Kuala Lumpur were in the building design stage while the other three were under negotiations for the purchase of land and building.

“We are looking to set up a boutique hotel in Sri Hartamas, a Dorsett Hotel in Cheras, Dorsett Hotel & Resorts in Kota Kinabalu, a Grand Dorsett Hotel in Penang and a hotel and a resort in Kuantan or Kelantan,” he added.

Tang, formerly the chief financial officer of Malaysian Land Properties Sdn Bhd, was appointed president of Dorsett International in early January to oversee the management of the company’s five hotels in Malaysia.

He said Dorsett International was undertaking a rebranding exercise to consolidate its operations.

The company has four brands in Malaysia – Grand Dorsett, Dorsett Regency (business and leisure hotel), Dorsett Hotel (mid-range hotel) and Maytower Hotel & Serviced Residences (a combination of hotel and serviced residences).

“Under the rebranding exercise, the 502-room Sheraton Subang Hotel & Towers will be changed to a new name in October after the handover of operations effective Oct 1,” Tang said.

“By end-2010, customers will be able to identify and relate to the group’s various classes of hospitality services – international, mid-range and serviced residences,” he said.

Far East Consortium acquired Sheraton Subang Hotel & Towers from Starwood Hotels and Resorts Worldwide three years ago but the hotel had remained under the management of Starwood.

Tang said the renovation and refurbishment of Sheraton Subang had started and would cost RM60mil. “Our hotel rooms, reception and lobby lounge will have a totally fresh look,” he said.

However, Tang said, the rebranding would try to move away from the star-ratings system practised by Dorsett International’s sister hotels in Hong Kong.

“In Hong Kong, a lot of hotels are breaking away from the star ratings,” he noted.

According to Tang, hotels rated four stars and below have been spared the full impact of the global economic slowdown as people cut down on lodging expenses and downgraded their accomodation needs.

“In the first three months of this year, Sheraton Subang was quite badly hit too. However, we expect demand to pick up again.

“I see the global economy coming back, given the high occupancy rates in our hotels now,” he said.

Currently, Sheraton Subang has a 70% occupancy rate while the Dorsett Regency has 80%, Grand Dorsett Labuan 85%, Dorsett Johor Hotel 60% and Maytower Hotel & Serviced Residences 60%.

Dorsett International would also focus on the meeting, incentives, conventions and exhibitions (MICE) segment, Tang said, noting: “You will be surprised to see that MICE actually contributes quite handsomely to the group’s revenue.”

The company would upgrade the MICE facilities in Sheraton Subang next year under the second phase of refurbishment, he added.

According to Tang, Dorsett International will also look at expanding its outside catering business.

He said Dorsett Regency had been running the outside catering business for three years now, while Dorsett Johor Hotel had just begun in mid-June. Sheraton Subang used to do it under the management of Starwood.

“The response has been good so far and we will emphasise more on outside catering in the future,” he said.

For the financial year ended March 31 (FY09), Dorsett International posted a revenue of RM112mil.

Based on its current occupancy rates, the company expected revenue of RM125mil in this financial year, Tang said.

The hotel operator forecasts a revenue of RM143mil in FY11 as more hotels are rolled out and as it reaps the benefits of its rebranding exercise.

By The Star (by Rachael Kam)

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