Occupancy picks up after some tweaks at hotel

Welcoming: Ibis Styles hotels cater to business travelers with a good mix of leisure clientele

LOCATION, location, location! is a common mantra for any property-related business, be it property development, retail or hospitality.

And Cheras seems an unlikely location for the hospitality business.

But Ibis Styles Hotel general manager Hubert Low believes that the corporate hotel can leverage on the thriving business environment in Cheras to build its market.

“When you are given a hotel in any location, it is important to understand the environment around the hotel. For us, pricing and brand awareness is there. But we need to identify our market and get in touch with potential guests.

“Cheras is a growing area and people are here for specific reasons,” Low said.

He noted that there were more than 600 factories and companies based in Cheras and these organisations increasingly engaged talents and expertise from out of town and even from abroad, which provides Ibis Styles with a good catchment area.

The 156-room premium economy hotel is nestled within Dataran C180 in Cheras, an 18 acre mixed development project by Mitraland Group.

At the moment, hotel guests are either business travellers or those visiting family living nearby, Low said.

But Low was pleasantly surprised that Ibis Styles Cheras has attracted a good number of leisure travellers, particularly from China and Europe.

The hotel has a good mix of business and leisure clientele and occasionally enjoys spillover business from the MIECC crowd that descends on the area for large conventions as it is conveniently located near the Mines Convention Centre.

Of course, it helps that the hotel is part of the Ibis international chain under the Accor Group. The Accor Group also operates the Pullman and Novotel hotels in Malaysia.

Nonetheless, Low concedes that Ibis Styles Cheras is a tough business to run. Not only is it a competitive industry, but there is much to be desired in demand.

“The demand is tough here. Notably, people will naturally think of looking at rooming options in the city centre. It is a challenge. But if you rationalise it, we are not a big hotel. We only have 156 rooms. If we have 156 guests, that is already 100% occupancy,” he said.

Currently, average occupancy rate at the hotel is still low, at about 45%.

Low started out in the hotel line in 1987 as a part-time waiter in KL Hilton. He quickly worked his way up the ladder, supervising openings of new F&B outlets in hotels and he was eventually promoted as a hotel general manager before the age of 30.

He has since overseen the opening of several hotels.

“My forte is in opening new hotels. It is certainly a very challenging task because you are operating on your own before any team comes in. You are the one who manages, trains the staff and sets the system,” he said.

Catered for opportunities

While Ibis Styles’ mainstay is in the business travelling segment, the hotel had initially received a considerable amount leisure travellers and group bookings when it first opened.

The Chinese leisure travel market had helped boost Ibis Styles low occupancy rate of 30% in its early days.

But due to its strong emphasis as a business hotel, Ibis Styles did not have sufficient beds to meet this demand as the bulk of the rooms were for queen-sized beds. Only 40% of its 156 rooms had twin beds, which, Low noted, were more suitable for group bookings.

Because of that, Low often had to turn away good business.

After some thought, he convinced the hotel owners to invest in reconfiguring the beds in the rooms to cater to this new opportunity. The bill to reconfigure the rooms came up to about RM70,000.

“Better to invest that than to turn away business. We were losing business because of the queen beds. It is an opportunity cost and we need to invest to grow the business. So we are moving with the market,” he said.

Sales picked up considerably after the change in rooms. Now, about 60% of its rooms have twin beds.

Low has also expanded the hotel’s banquet facilities as he noted that companies as well as government agencies were increasingly looking for venues to cater to small to mid-sized events and this could prove to be a lucrative business for Ibis Styles Cheras. This is another uncharacteristic element of Ibis Styles.

But Low emphasised that changes at the hotel cannot render its identity unrecognisable.

“We can’t change too much because we want to maintain the hotel’s identity. We are a business plus leisure hotel and we need to keep the integrity of Ibis Styles or it will affect customers’ perception and indirectly affect business,” he said.

“Ibis is really growing fast here. We want to eventually have a presence in every state,” Low added.

Apart from the hotel in Cheras, there is another Ibis Styles hotel in KL Fraser Park and another one due for completion in Ipoh.

Additionally, the chain will be introducing Ibis Hotel, which caters more to the leisure market, to Kuala Lumpur soon.

Low hopes to boost occupancy at the Cheras hotel to a comfortable level of 70% to ensure good returns for the hotel owners. He noted that room margins can go up to 80%.

“We are not over-pricing ourselves. We need to introduce ourselves to the local market and our rates will eventually adjust when the business improves.

“As a hotel, we need to be differentiated from our competitors and people make the difference here. We try to give the business a personal touch. We are aiming for a zero-complaint operation and we hope our customers appreciate it,” he said.

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