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Local Hotels Can Do Better
Thursday, August 14, 2003

KUALA LUMPUR, According to Value Hospitality Group, hotels in the country have tremendous untapped profit potential. Malaysia’s first and only hotel turnaround specialist added that local owners have not been able to tap the full benefit of their properties due to efficiency standards and sentiments.

The Group recently added another feather to its cap with the achievement of a successful turnaround exercise of the Karamunsing Hotel in Kota Kinabalu, Sabah, which resulted in a net improvement equivalent to RM1.8 million per year.

The Karamunsing Hotel was making a gross operating loss of approximately RM50,000 a month since it opened its doors in late 1997 when Value Hospitality was appointed to manage and turn around the hotel in May 2000.

Value Hospitality met the conditional challenge of improving the hotel’s gross operating profit by RM100,000 per month within six months by not only accomplishing this task within a shorter period of time but also by a greater margin.

As a result of the successful turnaround exercise, the 4-star 200-room Karamunsing hotel underwent a name-change and is presently known as the Beverly Hotel.

Dennis Tan, general manager of Value Hospitality said, “ With the introduction of new marketing programmes in the first month of our management, we raised the occupancy rate from 49 to 70 per cent. As a result, the hotel has surpassed the estimated industry occupancy rate in Kota Kinabalu by 10 to 15 per cent thanks to increased customer support.”

Value Hospitality owes its 100 per cent success rate to a management system that is both organic and result orientated in terms of conducting a thorough appraisal of the hotel operations with a view to assess service standards, cost reductions and revenue improvements. This is accompanied with a detailed implementation plan, management re-training, operational controls and monthly reporting standards.

Productivity programmes implemented at the Karamunsing Hotel have given rise to improved staff performance and productivity. The average staff contribution in sales more than doubled to RM4,800 per month by July 2000. The staff were also able to reap the benefits of this increase in productivity as their service points doubled as a result.

In addition to improved staff morale and a notable reduction in guest complaints due to improved service standards, there was also a significant reduction in the hotel’s operating cost thanks to an energy saving programme.

The subsequent name-change to Beverly Hotel has also given the establishment the mark of a Value Hospitality-managed hotel. Since the name-change, clients from the business sector who have stayed at other hotels managed by the Group have also shown their support of the Beverly Hotel in Kota Kinabalu.

Established in 1990, the Group currently manages a stable of four, three and two-star hotels in the nation and overseas. Some 500 professionals are employed in six of these properties. The Group’s expertise also extends to hotel design, construction management and investment advice.

Other properties currently managed by Value Hospitality include the Beverly Hotel in Bintulu, Sarawak; the Prescott Hotels in Bongawan (Sabah), Klang (Selangor) and Bukit Mertajam (Penang); as well as the Value Inn in Kuala Lumpur.

 
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