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Tuesday, September 1, 2009

Tanjung Rhu Resort eyes niche market

LUXURY hotel Tanjung Rhu Resort Langkawi plans to build villas at the 8ha resort to capture a new and niche market segment.

A total of 20 villas with private swimming pool are scheduled to be built and completed by end-2011.

"We expect to open five or six of the four-bedroom pool villas in the fourth quarter of 2010 and the remaining in 2011," general manager IZ Melvin said.

"This concept is popular in resort islands like Bali, Phuket and Koh Samui ... but there are only two resorts in Langkawi offering luxury villa accommodation.
"We want to target a niche group especially those who want privacy," he said.

Tanjung Rhu is owned by Tanjung Rhu Land Sdn Bhd and operated by hospitality group Signforce Sdn Bhd.

The 136-rooms are set to undergo some changes, to keep the hotel fresh and more relevant for its market mix. Its last upgrade was in 2005.

The property, owned by Promet Bhd, was originally built as an apartment in 1991. In 1993, the current owners bought the property and converted into a hotel and brought in Radisson Hotels & Resorts Group to operate the property.

Then in June 1999, Signforce took over the management of the hotel. Melvin, who is also Signforce's chief operating officer said that since its entry the average room rate (ARR) at the resort has swelled.

"When Signforce came in the ARR was RM350. Since then, our rates have picked up at an average of 9 per cent to 12 per cent year-on-year," Melvin to Business Times during a recent visit to his resort.

The hotel last year filled 62 per cent of its rooms and enjoyed RM1,500 per occupied room for two which includes food and beverage. About 95 per cent of its guests eat at the hotel and contribute towards 34 per cent of food and beverage revenue.

Last year, Tanjung Rhu's gross operating profit (GOP) was 52 per cent. GOP is gross revenue (from rooms, food and beverage, laundry or business centre) minus cost of operations (wages, electricity and amenities).

This year, however, as a result of the global economic downturn and the H1N1 flu, the hotel is expected to see occupancy slip to 58 per cent and per occupied room spend to be RM1,450.

On a more positive note, business in July 2009, saw a sharp improvement with occupancy reaching 80 per cent.

The hotel predominantly caters to the leisure group from the UK, Japan, Australia, Holland and France.

Only 12 per cent of its business is the corporate crowd which is mostly during the Langkawi International Maritime and Aerospace Exhibition.

When asked on how Tanjung Rhu emerged as the top three on the island in terms of rates despite being a locally-owned hotel, carrying a local name and run by locals, Melvin said that it has to do with the hotel's guest experience.

"When it comes to leisure accommodation, people not necessarily look for a brandname but rather an experience. Our biggest selling point is, we sell experiences," he said.

And in support of this, he said, a quarter of its guests are repeat visitors.

By Business Times (by Vasantha Ganesan)

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