RAM lifts rating watch on several hoteliers

WITH the recent rejuvenation of hoteliers, Rating Agency Malaysia Bhd (RAM) is lifting the Rating Watch on several hoteliers. 

In a statement, RAM said it lifted the Rating Watch on CDH Hotels Sdn Bhd (The Regent Kuala Lumpur, rated at P2s), Inter Heritage Sdn Bhd (Sheraton Imperial, Kuala Lumpur with rating of C1), Ikatan Perkasa Sdn Bhd (The Datai, Langkawi, rated at A2) and Gula Perak (Dynasty Hotel, Kuala Lumpur and Empress Hotel, Sepang, rated at A1s). 

The A2 rating on Sunway City Bhd (Sunway Lagoon Resort Hotel, Petaling Jaya; Sunway Hotel, Penang; and Sunway Hotel, Seberang Jaya) is also lifted. 

However, the A2s rating on Sutera Harbour Resorts Sdn Bhd (SHR) Tranche 1 (Magellan Sutera Hotel, Kota Kinabalu) and A3s rating on Tranche 2 (Pacific Sutera Hotel, Kota Kinabalu) have been downgraded to BBB2s and BBB3s respectively.  

“During the period under review, SHRS performed below expectations,” RAM said. 

It said that apart from the severe acute respiratory syndrome (SARS) outbreak that had taken a heavy toll on the average occupancy rates of SHR's hotels, its golf course operations and membership sales as well as proceeds from the sale of properties were substantially below earlier projections. 

RAM said it was maintaining the Rating Watch for Pernas International Holdings Bhd – BB3s (developing outlook) – and FACB Resorts Bhd – B1s (negative outlook) – due to other developments. 

On May 2, 2003, RAM had placed the ratings of hoteliers on Rating Watch, with a negative outlook, premised on the highly uncertain ramifications of the SARS on the tourism industry. 

Following the successful containment of the disease, the World Health Organisation lifted the last travel advisory – on Taiwan – on July 5, 2003. 

RAM noted that the Malaysian tourism industry, almost crippled by the SARS outbreak, had recently exhibited signs of a revival. 

Although many have yet to recover to pre-SARS levels, occupancy rates for most hotels rated by RAM picked up in June and July, it said. 

Most hoteliers are hopeful that the rising occupancy rates will hold in the coming months given that most economic activities have returned to normal, it added. 

Even so, RAM expected the tourism industry to only gather significant momentum towards the end of 2003. It said that based on its observations of past crises, tourism usually achieved full recovery within six months. – Bernama