Suncity confident hotel occupancy rates will return to normal by Q2 next year


  • Business
  • Saturday, 24 May 2003

BY SABRY TAHIR

SUNWAY City Bhd (Suncity), the owner of Sunway Lagoon Resort Hotel which saw occupancy rates drop to a historic low of 40% in April, sees a glimmer of hope this month as the trend has bottomed out and things are likely to return to normal by the second quarter of this year. 

And the company, which also owns and runs Sunway Pyramid shopping mall and Sunway Lagoon theme park, looks set to operate another 562-room hotel by the middle of next year. 

Suncity deputy managing director Ngeow Voon Yean said the company's move to tighten its belt had provided some buffer to last month's huge shortfall of patrons. 

“The Iraq war and SARS (Severe Acute Respiratory Syndrome) outbreak will have bearing only on our second quarter results as we anticipate an uptrend in occupancy rates in the second half of this year,'' he said after launching Suncity Sunshine Packages in Bandar Sunway yesterday. 

According to him, the hotel, which made RM77mil in sales last year, saw a 10% higher sales in the first quarter of 2003 against the corresponding period last year. “It is the theme park that is worst affected,” he said. 

Tourists from China, Taiwan and Hong Kong on average accounted for about 30% of the visitors to the theme park. 

Retailers at Sunway Pyramid had complained of 10% to 12% drop in sales despite a rise of about 15% in traffic during the first quarter of this year. Suncity attributed this to the weaker economic sentiments. 

According to Ngeow, the rosier outlook in the third quarter would be partly attributed to the impact of the Government's economic package and efforts to woo inbound tourists, including the half-month bonus to civil servants and the reduction in the EPF contribution, to stimulate domestic consumer spending. 

As local patrons generated about 60% to 70% of the hotel’s revenue, most of the hotel's promotional activities would be targeted at the local market . 

These includes cutting room rates, food and beverage prices, and theme park charges by between 31% and 37% as reflected in the company's Sunshine Packages. 

According to Ngeow, Suncity spends 8% of its annual sales turnover on advertising and promotion. He expects this year's budget to match the RM6mil spent last year.  

He also said the company would continue with its RM200mil expansion programme, which includes the new hotel and 265 service apartments, despite the current sluggish market. 

The hotel is due for completion in June next year.  

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