RAM places hotels on rating watch

  • Business
  • Saturday, 03 May 2003

RATING Agency Malaysia Bhd (RAM) has placed a rating watch with a negative outlook on some hoteliers in Malaysia in view of the increasing threat from the Severe Acute Respiratory Syndrome (SARS) on the Industry. 

RAM said the heavy toll SARS took on hotels in the country became more evident in April, exceeding initial expectations. However, the extent of decline varied among the players, RAM said in a statement yesterday.  

RAM has assigned CDL Hotels Sdn Bhd's The Regent (Kuala Lumpur) at P1 (s); Inter Heritage Sdn Bhd's Sheraton Imperial (Kuala Lumpur) at C1; Pernas International Holdings Bhd's The Mutiara chain of hotels, Hotel Istana (Kuala Lumpur), PJ Hilton (Petaling Jaya), Kuching Hilton (Kuching), Batang Ai Hilton (Batang Ai) at BBB3 (s); 

Sunway City Bhd's Sunway Lagoon Resort Hotel (Petaling Jaya), Sunway Hotel (Penang) and Sunway Hotel (Seberang Jaya) at A2; FACB Resorts Bhd's Nexus Resorts Karambunai (Kota Kinabalu) at B1 (s); Ikatan Perkasa Sdn Bhd's The Datai (Langkawi) at A2 (s), and Gula Perak Bhd's Dynasty Hotel (Kuala Lumpur) and Empress Hotel (Sepang) at B2 (s). 

RAM said that it would reassess the rating watch once WHO lifts most travel advisories and the tourism sector attains some semblance of normalcy.  

“Until the fear of the virus diminishes, we do not expect the hotel sector to be able to heave any sigh of relief,” it added. 

In April, occupancy was down to some 25% to 30% for most hotels with the exception of The Datai (Langkawi) and Sheraton Imperial (Kuala Lumpur), which still managed to fill up almost half of their rooms. In most cases, statistics showed 40% drops in occupancy rates relative to the same period a year ago. 

However, RAM said, the average room rates for almost all hotels were holding well, if not better. Nevertheless, with the highly uncertain ramifications of SARS at this juncture, hoteliers were bracing themselves for low occupancy over the next 12 months. 

“The only way to rejuvenate the tourism industry is to essentially bring SARS under control fast,” RAM said. 

Global travel suffered a particularly sharp contraction in April following the recommendation by the World Health Organisation (WHO) to curb non-essential travel to SARS-affected destinations. 

Combined with the increasingly widespread panic as more fatalities and new cases were reported in the region, particularly in China, the overly cautious sentiments had had a stifling effect on tourism. 

As with any industry with a low tolerance level for inauspicious global events, the tourism sector remained one of the heaviest casualties of these latest developments, RAM said. – Bernama  

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